Economic development in low income settings is often associated with an expansion of higher-value agricultural activities. Since these activities often bring new risks, an understanding of cropland decisions and how these interact with shocks is valuable. This paper uses data from Mozambique to examine the effect of weather shocks on cropland decisions. We account for the bounded nature of land shares and estimate a Pooled Fractional Probit model for panel data. Our results show that crop choice is sensitive to past
Water Variability and the Economic Impacts on Small-Scale Farmers. A Farm Risk-Based Integrated Modelling Approach
Strengthening the planning of hydrological resources to optimize the use ofwater in agriculture is a key adaptation measure of the Chilean agricultural sector to cope with future climate change. To address this challenge, decision-makers call for tools capable of representing farmers’ behaviours under the likely stresses generated by future climate conditions. In this context, of special concern are the effects of water variability on small-scale farmers, who commonly operate with narrow profit margins and who lack access to financial resources and technological knowledge.
Shale gas development in China can generate great potential economic benefits, but also poses serious environmental risks. In this paper, we offer a macro assessment of the environmental risks of shale gas development in China.
Using a series of laboratory economic experiments, we study the effect of information regarding the amount of the fine on the individual decision to violate an emission standard. Specifically, the analysis considers variations in the information available for the regulated subjects regarding the amount of the monetary sanction, as well as variations in the stringency in the inspection effort by the regulator.
This study used household survey data from four Kenyan towns to examine the effect of households' characteristics and risk perceptions on their decision to treat/filter water as well as on their choice of main drinking water source. Because the two decisions may be jointly made by the household, a seemingly unrelated bivariate probit model was estimated. It turned out that treating non-piped water and using piped water as a main drinking water source were substitutes.
Adaptation to climate change in Sub-Saharan agriculture: assessing the evidence and rethinking the drivers
In this paper, after a review of the evolution of the literature on climate change economics in agriculture, I present some evidence of the impact of different moments of the distribution of rainfall on farmers risk aversion.
Managing Environmental Risk in Presence of Climate Change: The Role of Adaptation in the Nile Basin of Ethiopia
This study investigates the impact of climate change adaptation on farm households’ downside risk exposure in the Nile Basin of Ethiopia. The analysis relies on a moment-based specification of the stochastic production function. We use an empirical strategy that accounts for the heterogeneity in the decision on whether to adapt or not, and for unobservable characteristics of farmers and their farm.
Cotton farmers in the Common Market for Eastern and Southern Africa (COMESA) face pest challenges, the most destructive of which is the African bollworm (Helicoverpa armigera). Reduction in these pest infestations can increase yields and improve welfare of cotton producers, consumers, and innovators. Currently, the control of bollworms in this region is done through application pesticides, which is a costly exercise in terms of cost of pesticides, spray equipment, and labor.
We study household decision making in a high-stakes experiment with a random sample of households in rural China. Spouses have to choose between risky lotteries, first separately and then jointly.
This study uses household survey data from four Kenyan towns to examine the effect of households’ characteristics and risk perceptions on their decision to treat/filter water as well as their choice of main drinking water source.
In an experiment, we study risk-taking of cohabitating student couples, finding that couples’ decisions are closer to risk-neutrality than single partners’ decisions. This finding is similar to earlier experiments with randomly assigned groups, corroborating external validity of earlier results.
This paper concerns the patterns of food crop choice in a multicropping setting, in which production risk considerations and rainfall uncertainty are likely to be critical factors.
Opportunity costs of conservation: The case of protected area management in the Kakamega Forest, Western Kenya
Knowing the local opportunity costs of restricting access to forest land and resources for conservation purposes is an important input to the design of cost-effective conservation schemes that minimize adverse effects on poor forest users.
Risk implications of farm technology adoption vary by technology type. If properly implemented, the safety net program and the weather insurance programs currently piloted in some parts of Ethiopia are actions that could hedge against downside risk.
The Role of Soil Conservation on Mean Crop Yield and Variance of Yield: Evidence from the Ethiopian Highlands
Stone bunds in the Ethiopian highlands showed statistically significant and positive impact on yield in low-rainfall areas, but not in high-rainfall areas, and they did not have a statistically significant impact on production risk in either area.