PolicyDesign

TUPD-2021-012

TITLE Adjustment costs in dynamically optimal pricing of a network good
AUTHORS Yi-Chun Ko

Ph.D. Student, Graduate School of Economics and Management, Tohoku University

Shinsuke Uchida

Associate Professor, Graduate School of Economics Nagoya City Univesity
Visiting Associate Professor,Policy Design Lab, Tohoku University

Akira Hibiki

Head, Policy Design Lab, Tohoku University
Professor, Graduate School of Economics and Management, Tohoku University

P D F
ABSTRUCT

The main purpose of our paper is to explore mechanisms of farmer’s adaptation to climate change. Specifically, we assess the farmer’s adaptation capacity to extremely low and high temperatures by quantifying the effect of farmer’s age and experience on the temperature-yield relationship. We estimate their effects by conducting the panel (short-run adjustment) and long-differences (long-run adaptation) analyses following Burke and Emerick (2016) with the municipality-level rice yield data in Japan from 1993 to 2018. We find that both age and experience of extreme temperatures are significant factors that strengthen the farmer’s adaptation capacity to climate. Age is more likely to help farmers adjust to annual weather fluctuations than to assist long-term adaptation to climate, whilst the past experience of extreme temperatures rather encourages farmers to adapt to the climate in the long run.

KEYWORDS Adaptation capacity, Age, Rice, Climate change, Crops yields, Temperature
ISSUED November 2021
REVISED March 2022

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