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Climate Change, Risk and Grain Production in China

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  • Holst, Rainer
  • Yu, Xiaohua
  • Grun, Carola

Abstract

This paper employs the production function-based method proposed by Just and Pope (1978, 1979) to explicitly analyze production risk in the context of Chinese grain farming and climate change, and test for a potential endogeneity of climate factors in Chinese grain production. Our results indicate that China might, at least in the short run, become a net beneficiary of climate change. In particular, we find that increases in annual average temperature increase mean output at the margin and at the same time lead to a reduction of production risk. Further calculations suggest that a 1 °C increase in annual average temperature would entail an economic benefit of $1.1 billion due to the increasing mean output. Furthermore, a Hausman test reveals no endogeneity of climate variables in Chinese grain production.

Suggested Citation

  • Holst, Rainer & Yu, Xiaohua & Grun, Carola, 2010. "Climate Change, Risk and Grain Production in China," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61177, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea10:61177
    DOI: 10.22004/ag.econ.61177
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    References listed on IDEAS

    as
    1. von Braun, Joachim, 2007. "The world food situation: New driving forces and required actions," Food policy reports 18, International Food Policy Research Institute (IFPRI).
    2. José Gustavo Féres & Eustáquio José Reis & Juliana Speranza, 2008. "Assessing the Impact of Climate Change on the Brazilian Agricultural Sector," Anais do XXXVI Encontro Nacional de Economia [Proceedings of the 36th Brazilian Economics Meeting] 200807181438190, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    3. repec:reg:rpubli:291 is not listed on IDEAS
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    Cited by:

    1. Raza, Amar & Ahmad, Munir, 2015. "Analysing the Impact of Climate Change on Cotton Productivity in Punjab and Sindh, Pakistan," MPRA Paper 72867, University Library of Munich, Germany.
    2. Anwar Hussain & Rabia Bangash, 2017. "Impact of Climate Change on Crops’ Productivity across Selected Agro-ecological Zones in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 56(2), pages 163-187.
    3. Saumya Verma & Shreekant Gupta & Partha Sen, 2020. "Does Climate Change Make Foodgrain Yields More Unpredictable? Evidence from India," CESifo Working Paper Series 8161, CESifo.
    4. Joshi, Niraj Prakash & Maharjan, Keshav Lall & Piya, Luni, 2011. "Effect of climate variables on yield of major food-crops in Nepal -A time-series analysis-," MPRA Paper 35379, University Library of Munich, Germany.

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    More about this item

    Keywords

    Crop Production/Industries; Environmental Economics and Policy; Risk and Uncertainty;
    All these keywords.

    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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