Crop-Livestock Inter-linkages and Climate Change Implications for Ethiopia’s Agriculture: A Ricardian Approach

There have been few attempts to look into the economic impacts of climate change in the context of Ethiopia. Although mixed crop-livestock farming is a dominant farming style, most of the studies on climate change, at least in the context of Ethiopia, have emphasized only crop agriculture and disregarded the role of livestock. In this research, we analyze climate change and agricultural productivity in Ethiopia in its broader sense, inclusive of livestock production. We employ a Ricardian approach, estimating three modified versions of the Ricardian model. Results show that warmer temperature is beneficial to livestock agriculture, while it is harmful to the Ethiopian economy from the crop agriculture point of view. Moreover, increasing/decreasing rainfall associated with climate change is damaging to both agricultural activities.