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A Ricardian analysis of the climate change impact on Nepalese agriculture


  • Thapa, Sridhar
  • Joshi, Ganesh Raj


This paper applies Ricardian approach to measure the effect of climate change on crop production in Nepal using cross-section data of Nepal Living Standard Survey 2003/04 and climate data from Department of Hydrology and Meteorology, Nepal. The study examines the relationship between net farm revenue and climate variables using 656 households of 14 districts covering all climatic zones of Nepal. Net farm revenue is regressed on climate and socio-economic variables. The findings show that these variables have significant impact on the net farm value per hectare. More specifically, relatively low precipitation and high temperature seem to have positive impact on net farm income during the fall and spring seasons. Net farm income is likely to be increased by summer precipitation, but not by temperature. Marginal impacts are mostly in line with the Ricardian model, showing marginally increasing precipitation during summer and winter would increase net farm income, but reduce by the quarter terms and temperature of these seasons. Moreover, marginally increasing precipitation would increase farm income in the hilly region, but reduce in Terai region. Other variables such as ratio of irrigated farm land and obtaining credit are found to be positive impact on net farm value but not by farm size. Conclusively, the impact of climate change on agriculture seems to be varied with the temperature and precipitation in different climatic zones.

Suggested Citation

  • Thapa, Sridhar & Joshi, Ganesh Raj, 2010. "A Ricardian analysis of the climate change impact on Nepalese agriculture," MPRA Paper 29785, University Library of Munich, Germany, revised Feb 2011.
  • Handle: RePEc:pra:mprapa:29785

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    References listed on IDEAS

    1. Pradeep Kurukulasuriya & Robert Mendelsohn & Rashid Hassan & James Benhin & Temesgen Deressa & Mbaye Diop & Helmy Mohamed Eid & K. Yerfi Fosu & Glwadys Gbetibouo & Suman Jain & Ali Mahamadou & Renneth, 2006. "Will African Agriculture Survive Climate Change?," World Bank Economic Review, World Bank Group, vol. 20(3), pages 367-388.
    2. Mendelsohn, Robert & Nordhaus, William D & Shaw, Daigee, 1994. "The Impact of Global Warming on Agriculture: A Ricardian Analysis," American Economic Review, American Economic Association, vol. 84(4), pages 753-771, September.
    3. Dinar, A. & Mendelsohn, R. & Evenson, R. & Parikh, J. & Sanghi, A. & Kumar, K. & McKinsey, J. & Lonergen, S., 1998. "Measuring the Impact of CLimate Change on Indian Agriculture," Papers 402, World Bank - Technical Papers.
    4. Cline, William R, 1996. "The Impact of Global Warming on Agriculture: Comment," American Economic Review, American Economic Association, vol. 86(5), pages 1309-1311, December.
    5. Temesgen Tadesse Deressa & Rashid M. Hassan, 2009. "Economic Impact of Climate Change on Crop Production in Ethiopia: Evidence from Cross-section Measures," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 18(4), pages 529-554, August.
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    Cited by:

    1. Oussama Zouabi & Nicolas Peridy, 2015. "Direct and indirect effects of climate on agriculture: an application of a spatial panel data analysis to Tunisia," Climatic Change, Springer, vol. 133(2), pages 301-320, November.
    2. Gautam, Mahesh R. & Timilsina, Govinda R. & Acharya, Kumud, 2013. "Climate change in the Himalayas : current state of knowledge," Policy Research Working Paper Series 6516, The World Bank.
    3. Loum, Alieu & Fogarassy, Csaba, 2015. "The effects of climate change on cereals yield of production and food security in Gambia," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 9(4).
    4. Chalise, Sudarshan & Naranpanawa, Athula & Bandara, Jayatilleke S. & Sarker, Tapan, 2017. "A general equilibrium assessment of climate change–induced loss of agricultural productivity in Nepal," Economic Modelling, Elsevier, vol. 62(C), pages 43-50.
    5. Joshi, Janak & Ali, Mohammad & Berrens, Robert P., 2017. "Valuing farm access to irrigation in Nepal: A hedonic pricing model," Agricultural Water Management, Elsevier, vol. 181(C), pages 35-46.

    More about this item


    climate change; agriculture; Ricardian approach; marginal impact; Nepal;

    JEL classification:

    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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