Browsing by Person "Chatzopoulos, Thomas"

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Microeconometric analysis of the impacts of climate change on German agriculture : applications and extensions of the Ricardian approach
(2015) Chatzopoulos, Thomas; Lippert, Christian
The so-called Ricardian approach is an econometrics-based climate change impact assessment frequently used by agricultural and environmental economists. The intuition behind this approach is that, in the long run, the optimal behavior of farms is climate-dependent. In essence, the approach explores the role of climate in determining farm profitability and potential adaptation, by regressing economic or behavioral measures of agricultural outcomes against climatic and various other land and site attributes. The overall output of the approach enables (i) the identification of profitability differentials due to climate differentials, (ii) marginal implicit pricing of climate, and (iii) a probabilistic exploration of long-run adaptation strategies. This cumulative dissertation took up the challenge of improving specific conceptual and methodological aspects of the Ricardian approach in order to render it a more realistic impact assessment tool. In particular, we aimed at a more efficient treatment of the variables that proxy climate, and at the imposition of structure on equations that can reflect adaptation. Three empirical studies were pursued for over 270,000 German farms at three spatial scales: districts (N = 439), community associations (n = 3,515), and communities (n = 9,684). For this reason, secondary data of various formats (e.g., farm census records, measurements by weather stations, digital images) on a host of characteristics (e.g., farm-specific, climatic, topographical, geographical) were extensively processed (e.g., integrated, geocoded, spatially interpolated, zonally rearranged) and spatially matched. We took a multi-model and multi-stage approach from an instrumental-variables (IV) perspective, which we coupled with advances from the subfield of spatial econometrics. From an empirical viewpoint, our results showed that historical climate change has generally been beneficial to the sector as a whole. The impact of historical mean annual temperature (precipitation) on average land rental prices is positive (concave). Indicatively, permanent-crop and vegetable farms value temperature more than the rest farm types, whereas forage farms, and to a certain extent mixed farms, stand out for their resilience to precipitation. Climate change in the near decades is likely to be beneficial, but the magnitude of benefits depends on the farm type one looks at.