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Long-Range Forecasts As Climate Adaptation: Experimental Evidence From Developing-Country Agriculture

Author

Listed:
  • Fiona Burlig
  • Amir Jina
  • Erin M. Kelley
  • Gregory V. Lane
  • Harshil Sahai

Abstract

Climate change increases weather variability, preventing farmers from tailoring investments to the upcoming monsoon. In theory, accurate, seasonal forecasts overcome this challenge. We experimentally evaluate monsoon onset forecasts in India, randomizing 250 villages into control, forecast, and benchmark insurance groups. Forecast farmers update their beliefs and behavior: receiving “good news” relative to a farmer’s prior increases cultivation, farm inputs, farm profits (for those unaffected by flooding) and reduces business; receiving “bad news” reduces cultivated land and farm profits but increases business. Overall, forecasts raise a welfare index by 0.06 SD. Unlike insurance, forecasts reduce climate risk by enabling tailoring.

Suggested Citation

  • Fiona Burlig & Amir Jina & Erin M. Kelley & Gregory V. Lane & Harshil Sahai, 2024. "Long-Range Forecasts As Climate Adaptation: Experimental Evidence From Developing-Country Agriculture," NBER Working Papers 32173, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32173
    Note: DEV EEE
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    Cited by:

    1. Zappalà, Guglielmo, 2024. "Adapting to climate change accounting for individual beliefs," Journal of Development Economics, Elsevier, vol. 169(C).

    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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