Outcome Distributions in Impact Assessment : Climate Change and Technology Adoption in Pacific Northwest Agriculture

Graduation date: 2016Increased temperature and precipitation variability and frequent extreme weather events due to climate change pose a threat to farming operations and agricultural communities. The recent IPCC assessment shows that the projected climate change will, on average, reduce wheat yields by 5% in temperate regions without adaptation and even more if temperatures continue to rise. Designing policies for helping climate-vulnerable farmers requires a comprehensive understanding of the impacts of climate change on agricultural systems and potential adaptation strategies. This dissertation consists of three essays that address several relevant issues from an economic perspective.\ud The first essay presents an empirical analysis to assess the impacts of climate change on farm-level economic outcome distributions for winter wheat systems (including winter wheat yield, farm revenue, expenditure, and net return) in the U.S. Pacific Northwest by using a flexible moment-based approach. Results indicate that a warming climate, on average, reduces winter wheat yield but increases farm economic returns in this region, while droughts have a large negative impact on the ex-ante distributions of winter wheat yields and farm net returns. Using the econometric estimates, the farm-level climate vulnerability is quantified and examined.\ud The second essay examines the effects of conservation tillage (including no-till and other conservation tillage) on winter wheat yield and production risk. We test the hypothesis that conservation tillage practices are risk-reducing. We use farm-level tillage practice data from the 2012 Agricultural Census for the U.S. Pacific Northwest. Results are estimated using a three-stage approach by integrating a multinomial logit model with a flexible moment-based approach. We find that conservation tillage has a negative effect on winter wheat productivity. We also find statistical evidence that conservation tillage is risk-increasing. Implications of the results for using conservation tillage to adapt to climate change are discussed.\ud The third essay compares the difference-in-difference and fixed effects approaches to estimate long-term climate impacts versus short-term weather effects on U.S winter wheat systems. A county-level panel dataset is used to assess the effects of climate and weather variables on winter wheat yield and farm revenue in the U.S. Pacific Northwest and the central Great Plains. The net effect of a warming climate is found to be negative on the winter wheat production both in the short run and the long run. Implications of the results for short-term adjustments and long-term adaptations are discussed