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A Cost of Tractability? Estimating Climate Change Impacts Using a Single Crop Market Understates Impacts on Market Conditions and Variability
Author(s) -
Thompson Wyatt,
Gerlt Scott,
Campbell J. Elliott,
Kueppers Lara M.,
Lu Yaqiong,
Snyder Mark A.
Publication year - 2017
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1093/aepp/ppw023
Subject(s) - climate change , crop , yield (engineering) , economics , agriculture , crop yield , agricultural economics , environmental science , econometrics , natural resource economics , variable (mathematics) , agricultural engineering , agronomy , mathematics , geography , ecology , mathematical analysis , materials science , archaeology , engineering , metallurgy , biology
Scientists estimate that U.S. Corn Belt crop yields will increase or decrease, on average, and become more variable with climate change. Corn and soybean farming dominates this region, but studies typically do not assess the joint impact of new distributions of corn and soybean yields on markets. We use a structural economic model with projections of climate‐driven yield changes to simulate these effects. Our findings suggest that a narrow focus on a single crop in this key growing region risks underestimating the impact on price distributions and average crop receipts, and can lead to incorrect signs on estimated impacts.