Abstract
Multiple previous reports have established that climate change disproportionately impacts smallholder farmers in developing countries. This study investigates the impact of climate change adaptation, defined by farmers’ decisions to adopt the improved practices to mitigate or reduce the effects of climate change, on crop revenue and revenue risk exposure. We employ the control function approach in an endogenous switching regression framework to account for selection bias. Using the household survey data from Nepal, we find that climate change adaptation positively affects crop revenue and revenue risk reduction. Specifically, climate change adaptation leads to a 21.6% increase in farm revenue and a 6.4% reduction in downside risk exposure, which are robust to several specifications. Counterfactual analysis shows the considerable heterogeneities in the outcomes among adapters and non-adapters. In particular, adapting farm households realize substantial and distinguishable gains in revenues and declines in risk levels relative to their non-adapting peer households. Our findings imply that adapting to climate change can be an effective management practice to mitigate the risks associated with climate change and increase resilience. • We explore the impact of climate change adaptation on crop revenue and revenue risk exposure in Nepal. • The study employs the control function approach in an endogenous switching regression framework to account for selection bias. • Climate change adaptation positively affects crop revenue and revenue risk reduction. • Adapting farm households realize substantial and distinguishable gains in revenues and declines in risk levels relative to their non-adapting peer households. • Adapting to climate change can be an effective management practice to mitigate the risks associated with climate change and increase resilience.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.