Weather Shocks Research Articles

Climate Change, Fertility and Sahelian Demographics

Climate change, especially in Africa’s central Sahel region, is occurring in the context of exponential population rise with countries like Chad and Niger still in the “early expanding phase” of demographic growth. While many experts predict a mid-century climate and demographic ‘mega crisis’ for the region; our paper looks at the effect of the rising temperature, through the medium of increased temperature and precipitation variability upon fertility and hence demographic trends as we advance into the 21st century. The paper uses climate data and DHS (Demographic and Health Survey) data from Chad, which has demonstrated significant warming since the late 1960’s. We create a weather shock variable that is defined as a t>2 departure from the post-1960 mean of temperature and precipitation by month, year, and GIS location. We regress the following years’ human fertility outcomes by month and GIS location upon these shocks when occurring in the growing months of June, July, and August. We find that the effect is highly negatively significant with a one-year lag. Then we go on to look for the mechanism behind this significance; the literature suggesting that climate effects fertility through biological or food security related channels. We then regress the male/female sex ratio on the same weather shocks to see if there is a rise in miscarriages among male fetuses due to either the direct effect of heat or as an effect of increased female malnutrition. By running both these models with weather shocks from Chad’s dry season months of December, January, and February, we discern whether the significance is driven by pure temperature or by some sort of food security/household income channel. Though we see some dry season effect, most of the significance is driven by the shocks in the growing season and with the significant effect of these shocks on the sex ratio, we can assume that increased female malnutrition is a key driver of both the rise in miscarriages and the drop-in fertility. We then run these models within each of the three Chadian climate zones: the Sahara, the Sahel, and the Sudan. Seeing that the Sahel zone is the major driver for the significance of our models, we discuss if this can have implications for the wider African Sahel.

Re-examining the impact of annual weather fluctuations on global livestock production

Attempts to analyze the effect of weather shocks on livestock production have been carried out using integrated assessment models (IAMs) or the cross-sectional (Ricardian) method. However, these methodologies are fraught with obvious shortcomings, such as omitted variable bias, amongst others. This paper, therefore, re-examines the relationship between weather changes and global livestock production using an established econometric strategy that takes care of the pitfalls inherent in the conventional approaches. Using country-level data and a variety of specifications, we find that a 1 °C increase in temperature will lead to a 9.7% reduction in global beef production on average. These adverse effects are amplified in hot, poor, and agriculture-dependent countries. Besides, we find that a marginal increase in annual precipitation would lead to a 2.1% increase in beef production in tropical countries but a 1.9% decrease in temperate ones. Also, our forecasts show that climate change will reduce animal output by a further 20% in the mid-century and an additional 40% by the end of the century assuming no adaptation other than the degree of adaptation observed in the historical period.

The impact of weather shocks on crop yields: Evidence from India

AbstractGiven that nearly half of the Indian labor force is employed in agriculture, extreme weather events may harm most of the country’s population. By exploiting annual variation within Indian districts, I test whether greater temperature fluctuations significantly decrease the output value of 13 major crops. I find that a 1°C deviation above the annual mean temperature leads to a 21.3 percentage point decline in output value for a given year, indicating substantial losses from large fluctuations in temperature. I also find evidence that proportion of crop area irrigated and fertilizer usage mitigates the negative impacts of temperature shocks.

Temperature shocks and gambling

Climate change threatens sustainable development by influencing myriad of outcomes. We examine if temperature shocks contribute to the gambling, which is a major public health concern globally. We use longitudinal data from the Household, Income and Labour Dynamics in Australia (HILDA) survey coupled with satellite data capturing neighbourhood temperature shocks. Our results suggest that temperature shocks increase the prevalence of gambling, and that psychological distress and social capital are channels through which temperature shocks transmit to gambling behaviour. Our results point to the need for policies that promote mental health and encourage social capital amidst extreme weather events in order to offset the effects of weather shocks on gambling behaviour.

Extreme weather events and high Colombian food prices: A non‐stationary extreme value approach1

AbstractGiven the importance of climate change and the increase of its severity under extreme weather events, we analyze the main drivers of high food prices in Colombia between 1985 and 2020 focusing on extreme weather shocks like a strong El Niño. We estimate a non‐stationary extreme value model for Colombian food prices. Our findings suggest that perishable foods are more exposed to extreme weather conditions in comparison to processed foods. In fact, an extremely low precipitation level explains only high prices in perishable foods. The risk of high perishable food prices is significantly larger for low rainfall levels (dry seasons) compared to high precipitation levels (rainy seasons). This risk gradually results in higher perishable food prices. It is nonlinear and is also significantly larger than the risk related to changes in the US dollar‐Colombian peso exchange rate and fuel prices. Those covariates also explain high prices for both perishable and processed foods. Finally, we find that the events associated with the strongest El Niño in 1988 and 2016 are expected to reoccur once every 50 years.

Econometric Approaches That Consider Farmers’ Adaptation in Estimating the Impacts of Climate Change on Agriculture: A Review

The question of whether and to what extent farmers can adapt to climate change has recently gained academic interest. This paper reviews contemporary econometric approaches that assess the impacts of climate change on agriculture and consider farmer adaptation, complementing previous methodological reviews with this distinctive adaptation perspective. The value of adaptation can be measured by comparing the differences between the long-term climate change effect and the short-term weather shock effect. However, this theoretical model has not yet been well supported by empirical evidence, as it is difficult to identify true adaptation, incorporating adaptation cost, and estimated adaptation rate. Quasi-natural experiments, cost-benefit analysis, and Bayesian models are effective tools to address these methodological drawbacks. Two methods dominate in the estimation of climate effects, but each has its own advantages. A good estimate provides a trade-off between the incorporation of farmers’ adaptive behavior and the reduction in omitted variables bias. Cross-sectional data models based on climate variability can capture farmers’ long-term adaptations but are prone to bias due to omitted variables. Panel data models are more effective at mitigating omitted variable bias by applying fixed effects, but do not consider farmers’ adaptative behavior to long-term climate change. To address this dilemma, several cutting-edge approaches have been developed, including integration with the weather and climate model, the long differences approach, and the long- and short-term hybrid approach. We found three key challenges, namely: (1) exploring adaptation mechanisms, (2) the CO2 fertilization effect, and (3) estimating the distributional effects of climate impacts. We also recommend future empirical studies to incorporate satellite remote sensing data, examine the relationship between different adaptation measures, model farmers’ future climate expectations, and include adaptation costs.

Economic shocks and the growth of the Ghanaian cocoa industry from 1975 to 2019

In this study, we sought to identify some economic shocks that have affected the Ghanaian cocoa industry and the effects of these shocks based on available annual data over the 45-year period from 1975 to 2019. The analysis was conducted using a simple autoregressive model of the cocoa industry. The results of the analysis indicated that the major economic shocks affecting the cocoa industry in Ghana were political instability arising from military coups, producer price shock linked to very high producer prices, the La Cote d’Ivoire civil wars between 2002 to 2007, and 2010 to 2011, which resulted in large-scale smuggling of cocoa beans across the border to Ghana for sale, and the El Nino weather shock characterized by severe droughts and very low amounts of rainfall, which dampened the production of cocoa beans in Ghana. The negative shocks were the El Nino weather phenomenon and political instability. The positive shocks were the very high producer prices and La Cote d’Ivoire civil war. We suggest some recommendations. These include increased resourcing of the Ghana Meteorological Agency to improve its prediction of extreme weather effects whose occurrence affect the production of crops such as cocoa, the establishment of bigger price stabilization funds by the Ghana Cocoa Board to support the cocoa industry, and research studies to analyse the apparent link between dramatic drop in cocoa production and explosive depreciation of the Ghanaian currency, the Ghana cedi.

Extreme weather and climate policy

ABSTRACT What effect does extreme weather have on climate policy? Existing studies show that weather shocks have negative economic impacts and increase public awareness of climate change. These findings help identify the impacts of climate change on economic and social systems, and provide reasons for governments to adopt climate policy reforms. However, questions remain about the overall link between local extreme weather shocks and government climate policy. I investigate the effect of temperature shocks and natural disasters on a range of national, international, and subnational climate policies in samples spanning 1990–2018. I find that neither temperature shocks nor natural disasters generate climate mitigation reforms. Given that climate policy is currently insufficient to manage climate change and climate impacts are expected to increase this century, these findings suggest that future climate shocks are unlikely to catalyze meaningful climate action.

Does Land Certification Mitigate the Negative Impact of Weather Shocks? Evidence from Rural Ethiopia

This study examines the effects of weather shocks on household consumption and how the land registration and certification program facilitate coping strategies to mitigate the negative income shocks. Using the difference-in-differences (DID) approach and household panel data from Ethiopia, we find that weather shocks negatively affected household consumption expenditure. As expected, households are not able to protect themselves from weather shocks. However, the land certification program facilitated coping strategies (obtaining credit and receiving gifts and assistance from informal sources) to mitigate the negative effect on food consumption against weather shocks. This effect is only found among smaller landowners. Therefore, the program is pro-poor and beneficial for improving the welfare of poorer households and protecting vulnerable households from entering into poverty traps.

The impact of weather shocks on employment outcomes: evidence from South Africa

AbstractClimate change is increasing the frequency of extreme weather events, such as drought and heat waves. In this paper, we assess the impact of drought and high temperatures on the employment outcomes of working-age individuals in South Africa between 2008 and 2017. We merge high-resolution weather data with detailed individual-level survey data on labor market outcomes, and estimate causal impacts using a fixed effects framework. We find that increases in the occurrence of drought reduce overall employment. These effects are concentrated in the tertiary sector, amongst informal workers, and in provinces with a higher reliance on tourism. Taken together, our results suggest that the impacts of climate change will be felt unequally by South Africa's workers.

Weather shocks and food price seasonality in Sub-Saharan Africa: Evidence from Niger

Semi-Arid regions of Sub-Saharan Africa are vulnerable to weather shocks, especially rural areas where households depend on rainfed agriculture and access to stable food markets are limited by high transaction costs. Understanding how weather shocks affect rural Sub-Saharan African households through both production and market price changes is crucial in designing sustainable and effective programs to increase resilience. Weather shock impacts on agricultural production and market prices are well documented in Africa. But little is known about the impacts of weather shocks on market price seasonality, which is an important determinant of food security. We investigate the distinct impacts of positive and negative rainfall shocks on millet production and millet price seasonality in Niger using district-level longitudinal production and price data, along with high-resolution rainfall data. We find that a one standard deviation decrease in seasonal rainfall from historical averages is associated with declines in millet market price initially after harvest, but strong upward pressure on market prices 6 months after harvest. As a result, drought exacerbates existing price seasonality, which in turn can amplify negative impacts on households. Social protection programs need to account for potential increases in seasonal price variability in the design of programs to enhance household resilience to weather shocks.

Gendered effects of early childhood weather shocks on locus of control: evidence from 28 agricultural countries

Gendered effects of early childhood weather shocks on locus of control: evidence from 28 agricultural countries

From a drought to HIV: An analysis of the effect of droughts on transactional sex and sexually transmitted infections in Malawi

Each year there are over 300 natural disasters globally with millions of victims that cost economic losses near USD$100 billion. In the context of climate change, an emerging literature linking extreme weather events to HIV infections suggests that efforts to control the HIV epidemic could be under threat. We used Demographic and Health Survey (DHS) data collected during the 2015–2016 harsh drought that affected several areas of Malawi to provide new evidence on the effect of an unanticipated economic shock on sexual behaviours of young women and men. We find that amongst women employed in agriculture, a six-months drought doubles their likelihood of engaging in transactional sex compared to women who were not affected by the drought and increases their likelihood of having a sexually transmitted infections (STI) by 48% in the past twelve months. Amongst men employed outside of agriculture, drought increases by 50% the likelihood of having a relationship with a woman engaged in transactional sex. These results suggest that women in agriculture experiencing economic shocks as a result of drought use transactional sex with unaffected men, i.e. men employed outside agriculture, as a coping mechanism, exposing themselves to the risk of contracting HIV. The effect was especially observed among non-educated women. A single drought in the last five years increases HIV prevalence in Malawi by around 15% amongst men and women. Overall, the results confirm that weather shocks are important drivers of risky sexual behaviours of young women relying on agriculture in Africa. Further research is needed to investigate the most adequate formal shock-coping strategies to be implemented in order to limit the negative consequences of natural disasters on HIV acquisition and transmission.

Economic development, weather shocks and child marriage in South Asia: A machine learning approach.

Globally, 21 percent of young women are married before their 18th birthday. Despite some progress in addressing child marriage, it remains a widespread practice, in particular in South Asia. While household predictors of child marriage have been studied extensively in the literature, the evidence base on macro-economic factors contributing to child marriage and models that predict where child marriage cases are most likely to occur remains limited. In this paper we aim to fill this gap and explore region-level indicators to predict the persistence of child marriage in four countries in South Asia, namely Bangladesh, India, Nepal and Pakistan. We apply machine learning techniques to child marriage data and develop a prediction model that relies largely on regional and local inputs such as droughts, floods, population growth and nightlight data to model the incidence of child marriages. We find that our gradient boosting model is able to identify a large proportion of the true child marriage cases and correctly classifies 77% of the true marriage cases, with a higher accuracy in Bangladesh (92% of the cases) and a lower accuracy in Nepal (70% of cases). In addition, all countries contain in their top 10 variables for classification nighttime light growth, a shock index of drought over the previous and the last two years and the regional level of education, suggesting that income shocks, regional economic activity and regional education levels play a significant role in predicting child marriage. Given the accuracy of the model to predict child marriage, our model is a valuable tool to support policy design in countries where household-level data remains limited.

Direct Shock Experience vs. Tangential Shock Exposure: Indirect Effects of Flood Shocks on Well-Being and Preferences

Abstract With extreme weather events on the rise, the question of how witnessing adverse weather events may affect individuals’ perception, and consequently their subjective well-being, gains in relevance. To identify events that have been witnessed, i.e., tangential exposure to a weather shock, satellite-based data on flooding is linked to an extensive household panel survey from rural Southeast Asia. Contrasting direct shock experience with tangential shock exposure, we find that mere proximity to a potentially adverse shock, without reporting any actual direct shock experience, could be sufficient to reduce subjective well-being. This effect is not only restricted to the present but can also impinge on expected future well-being dynamics. Eventually, such a persistent effect from witnessing a weather shock may have further politico-economic repercussions, for instance, by altering support for redistribution policies.

Improving Rice Production Efficiency in Myanmar by Controlling for Environmental Production Factors

Rice is the dominant crop in Myanmar and central to the agricultural economy. To increase rice productivity, farmers’ production performance is vital. This requires adjusting the availability of physical production inputs in response to environmental conditions. Very few studies have focused on the effects of relevant environmental conditions in Myanmar, including the impact of weather shocks during the rice production. This study aimed to the improve rice production based on the present performance of rice farmers, while controlling the impact of adverse environmental conditions. Information on rice production was extracted randomly from in-depth interviews with rice farmers in the Ayeyarwady Delta region. The Cobb-Douglas stochastic production frontier function was applied to examine the effects of the underestimated environmental factors. Erratic rainfall and excessive temperature during early growth stage have a significant negative impact on monsoon rice productivity. During the 2018-2019 monsoon cropping season, different levels of yield loss due to weather shock negatively affected rice farmers’ production efficiency. Controlling the environmental conditions improved technical efficiency from 88% to 93%. Based on these findings, policy makers and stakeholders should invest in climate services development, thus enhancing farmers’ understanding of weather variability and upscaling the use of local climate adaptation strategies in accordance with the Myanmar Climate Smart Agriculture Strategy.

Weather shocks and economic growth in India

ABSTRACT This study examines the effects of weather shocks on the economic growth in the Indian context. By using state and district level data on weather variables (viz., temperature and rainfall) and growth rate of per-capita real GDP, the study evaluates the short-run as well as medium-run effects of changing weather on the growth. We use a fixed-effects model on state- and district-panel data sets spanning across several decades. The results based on the state-level analysis are suggestive of negative effects of the increasing temperature on the growth during 1980–2019. These aggregate results are further reinforced by the results from the district-level analysis. We find that higher temperatures have a significant negative impact on poorer districts, with a 1°C increase in temperature leading to a nearly 4.7% fall in the growth rate of district per-capita income. Moreover, higher temperatures not only have level effects but also have growth effects, especially for richer districts. Further, to propound tangible climate adaptation policy discussion, we use some developmental characteristics like credit access, electrification, urbanisation, and improved roads and market network in our analysis. The results suggest that such developmental characteristics may play a significant role in mitigating the negative impacts of climate change.

Climate Change and Adaptation in Global Supply-Chain Networks

This paper examines how physical climate risks affect firms' financial performance and operational risk management in global supply-chains. We document that weather shocks at supplier locations reduce the operating performance of suppliers and their customers. Further, customers respond to perceived changes in suppliers' climate-risk exposure: When realized shocks exceed ex-ante expectations, customers are 6-11% more likely to terminate existing supplier-relationships. Consistent with models of experience-based learning, this effect increases with signal strength and repetition, is insensitive to long-term climate projections, and increases with industry competitiveness and decreases with supply-chain integration. Customers subsequently choose replacement suppliers with lower expected climate-risk exposure.

Shocks, agricultural productivity, and natural resource extraction in rural Southeast Asia

Natural resources are depleting at an alarming rate, causing severe threats to the sustainable development in many developing countries. Given an ambiguous relationship between shocks, agricultural productivity, and natural resource extraction, we used a dataset of about 4200 rural households surveyed in four Southeast Asian countries (Cambodia, Laos, Thailand, and Vietnam) to investigate the impact of shocks and agricultural productivity on natural resource extraction by rural households. Our results show that weather shocks and market shocks force households to extract more natural resources. An increased agricultural productivity, however, discourages natural resource extraction. In addition, our results show that low education and low access to electricity are positively associated with natural resource extraction. We suggest that measures enhancing agricultural productivity should be prioritized, and more assistance and support to farmers for mitigating the severe effects of weather shocks and market shocks should be provided. Furthermore, accelerating farm mechanization, land defragmentation, rural electrification, supporting the development of communication systems and local markets, and promoting rural education should be encouraged.

Outsourcing the dry season: Cattle ranchers' responses to weather shocks in the Brazilian Amazon

AbstractLivestock production plays a vital role in the global economy, yet little is known about how climate change will affect the industry. Studies of crop agriculture may not translate to livestock agriculture due to differences in the set of potential adaptation strategies. Ranchers' responses to changing weather and climate are particularly relevant in the Brazilian Amazon, where the dry season is increasing by as much as 0.6 days per year. A longer dry season increases production risks as animals may succumb to starvation, lack of water, or heat stress. I pair transaction data and weather shocks to show that ranchers strategically sold animals prior to the dry season, in response to two predictors of an extreme dry season: sporadic rainfall and high temperatures prior to the dry season. Ranchers sold animals for both fattening and slaughter in response to sporadic rainfall prior. Nearly half of animals initially sold for fattening were sold for slaughter 90 days later. In contrast, ranchers responded to high temperatures solely by selling for slaughter, suggesting that current on‐farm technologies are insufficient to prevent losses from heat stress. The overall supply increased in years with sporadic rainfall and high temperatures, but the supply fell by a greater amount the following year. My results suggest that farmers are currently not fully insulated from the effects of a severe dry season. As severe dry seasons become more frequent, the industry will likely increasingly rely on feedlots and need additional methods to cope with heat stress.