PolicyDesign

TUPD-2024-004

TITLE Substitution of Human and Physical Capitals in Farm Adaptation to Extreme Temperatures: Evidence from Corn Yields in US
AUTHORS Yi-Chun Ko

Assistant Professor, Asian Growth Research Institute
Visiting Researcher, Graduate School of Economics and Management, Tohoku University

Shinsuke Uchida

Professor, Graduate School of Economics Nagoya City Univesity
Visiting Professor,Research Center for Policy Design, Tohoku University

Akira Hibiki

Director, Research Center for Policy Design, Tohoku University
Professor, Graduate School of Economics and Management, Tohoku University

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ABSTRACT

This study delves into the factors that underly farmer’s adaptation of farm production to extreme weather. Specifically, we examine how farmer’s age mitigates the negative effects of extreme temperatures on crop yields. Our findings reveal a nonlinear relationship between age and the ability to adapt, wherein the adaptation capability generally increases and then decreases with age. Furthermore, we explore how farmer’s age interacts with farm technology, such as irrigation, to influence farmer’s adaptation simultaneously. Interestingly, age effects are less pronounced in irrigated areas, where the likelihood of exposure to climate risk is comparably low. This suggests that human capital plays a critical role in introducing adaptation measures in areas at high risk of exposure to extreme temperatures.

KEYWORDS Adaptation, Adaptation capability, Climate change, Corn, Crops yields, Extreme temperatures, Farmer’s age, Irrigation
POSTED March 2024

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