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Long-Range Forecasts As Climate Adaptation: Experimental Evidence From Developing-Country Agriculture

Author

Listed:
  • Fiona Burlig
  • Amir Jina
  • Erin M. Kelley
  • Gregory V. Lane
  • Harshil Sahai

Abstract

Climate change increases weather variability, exacerbating agricultural risk in poor countries. Risk-averse farmers are unable to tailor their planting decisions to the coming season, and underinvest in profitable inputs. Accurate, long-range forecasts enable farmers to optimize for the season ahead. We experimentally evaluate monsoon onset forecasts in India, randomizing 250 villages into control; a forecast group receiving information well in advance of onset; and a benchmark index insurance group. Forecast farmers update their beliefs and their behavior: farmers who receive “bad news” relative to their priors substantially reduce land under cultivation and certain input expenditures, while those receiving “good news” significantly increase input expenditures. The forecast also impacts crop choice, as farmers tailor their investments. These investment changes meaningfully alter ex post outcomes. In contrast, insurance, which provides no information, increases investments but does not change crops. Our results demonstrate that forecasts are a promising tool for climate adaptation

Suggested Citation

  • Fiona Burlig & Amir Jina & Erin M. Kelley & Gregory V. Lane & Harshil Sahai, 2024. "Long-Range Forecasts As Climate Adaptation: Experimental Evidence From Developing-Country Agriculture," NBER Working Papers 32173, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32173
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    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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