The impact of climate change on agriculture:Nonlinear effects and aggregation bias in Ricardian models of farmland values

Fezzi, Carlo and Bateman, Ian (2015) The impact of climate change on agriculture:Nonlinear effects and aggregation bias in Ricardian models of farmland values. Journal of the Association of Environmental and Resource Economists, 2 (1). pp. 57-92. ISSN 2333-5955

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Abstract

Ricardian (hedonic) analyses of the impact of climate change on farmland values typically assume additively separable effects of temperature and precipitation with model estimation being implemented on data aggregated across counties or large regions. We use a large panel of farm-level data to investigate the potential bias induced by such approaches. Consistent with the literature on plant physiology, we observe significant non-linear interaction effects, with more abundant precipitation acting as a mitigating factor for increased heat stress. This interaction disappears when the same data is aggregated in the conventional manner, leading to predictions of climate change impacts which are significantly distorted.

Item Type: Article
Uncontrolled Keywords: climate change,agriculture,ricardian analysis,aggregation bias,semi-parametric models
Faculty \ School: Faculty of Science > School of Environmental Sciences
Depositing User: Pure Connector
Date Deposited: 19 Jan 2015 11:00
Last Modified: 27 Jul 2020 23:43
URI: https://ueaeprints.uea.ac.uk/id/eprint/51883
DOI: 10.1086/680257

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