Temperature shocks, short-term growth and poverty thresholds: Evidence from rural Tanzania

Marco Letta, Pierluigi Montalbano, Richard S.J. Tol

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Using the LSMS-ISA Tanzania National Panel Survey by the World Bank, we study the relationship between rural household consumption growth and temperature shocks over the period 2008–2013. Temperature shocks have a negative and significant impact on household growth if their initial consumption lies below a critical threshold. As such, temperature shocks slow income convergence among households, at least in the short run. Crop yields and total factor productivity in agriculture are the main transmission channels. Extrapolating from short-term elasticities to long-run phenomena, these findings support the Schelling Conjecture: economic development would help poor farming households to reduce the impacts of climate change. Hence, closing the yield gap, modernizing agriculture and favouring the structural transformation of the economy are all crucial issues for adaptation of farmers to the negative effects of global warming.

LanguageEnglish
Pages13-32
Number of pages20
JournalWorld Development
Volume112
DOIs
Publication statusPublished - 1 Dec 2018

Fingerprint

Tanzania
poverty
agriculture
International Sociological Association
World Bank
evidence
farmer
climate change
productivity
temperature
income
total factor productivity
economy
crop yield
elasticity
economics
global warming
economic development
household
Household

Keywords

  • Climate change
  • Household consumption growth
  • Rural development
  • Weather shocks

Cite this

@article{70856e6ecc2644be8ed3b753e648fcfb,
title = "Temperature shocks, short-term growth and poverty thresholds: Evidence from rural Tanzania",
abstract = "Using the LSMS-ISA Tanzania National Panel Survey by the World Bank, we study the relationship between rural household consumption growth and temperature shocks over the period 2008–2013. Temperature shocks have a negative and significant impact on household growth if their initial consumption lies below a critical threshold. As such, temperature shocks slow income convergence among households, at least in the short run. Crop yields and total factor productivity in agriculture are the main transmission channels. Extrapolating from short-term elasticities to long-run phenomena, these findings support the Schelling Conjecture: economic development would help poor farming households to reduce the impacts of climate change. Hence, closing the yield gap, modernizing agriculture and favouring the structural transformation of the economy are all crucial issues for adaptation of farmers to the negative effects of global warming.",
keywords = "Climate change, Household consumption growth, Rural development, Weather shocks",
author = "Marco Letta and Pierluigi Montalbano and Tol, {Richard S.J.}",
year = "2018",
month = "12",
day = "1",
doi = "10.1016/j.worlddev.2018.07.013",
language = "English",
volume = "112",
pages = "13--32",
journal = "World Development",
issn = "0305-750X",
publisher = "Elsevier BV",

}

Temperature shocks, short-term growth and poverty thresholds : Evidence from rural Tanzania. / Letta, Marco; Montalbano, Pierluigi; Tol, Richard S.J.

In: World Development, Vol. 112, 01.12.2018, p. 13-32.

Research output: Contribution to JournalArticleAcademicpeer-review

TY - JOUR

T1 - Temperature shocks, short-term growth and poverty thresholds

T2 - World Development

AU - Letta, Marco

AU - Montalbano, Pierluigi

AU - Tol, Richard S.J.

PY - 2018/12/1

Y1 - 2018/12/1

N2 - Using the LSMS-ISA Tanzania National Panel Survey by the World Bank, we study the relationship between rural household consumption growth and temperature shocks over the period 2008–2013. Temperature shocks have a negative and significant impact on household growth if their initial consumption lies below a critical threshold. As such, temperature shocks slow income convergence among households, at least in the short run. Crop yields and total factor productivity in agriculture are the main transmission channels. Extrapolating from short-term elasticities to long-run phenomena, these findings support the Schelling Conjecture: economic development would help poor farming households to reduce the impacts of climate change. Hence, closing the yield gap, modernizing agriculture and favouring the structural transformation of the economy are all crucial issues for adaptation of farmers to the negative effects of global warming.

AB - Using the LSMS-ISA Tanzania National Panel Survey by the World Bank, we study the relationship between rural household consumption growth and temperature shocks over the period 2008–2013. Temperature shocks have a negative and significant impact on household growth if their initial consumption lies below a critical threshold. As such, temperature shocks slow income convergence among households, at least in the short run. Crop yields and total factor productivity in agriculture are the main transmission channels. Extrapolating from short-term elasticities to long-run phenomena, these findings support the Schelling Conjecture: economic development would help poor farming households to reduce the impacts of climate change. Hence, closing the yield gap, modernizing agriculture and favouring the structural transformation of the economy are all crucial issues for adaptation of farmers to the negative effects of global warming.

KW - Climate change

KW - Household consumption growth

KW - Rural development

KW - Weather shocks

UR - http://www.scopus.com/inward/record.url?scp=85051136459&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85051136459&partnerID=8YFLogxK

U2 - 10.1016/j.worlddev.2018.07.013

DO - 10.1016/j.worlddev.2018.07.013

M3 - Article

VL - 112

SP - 13

EP - 32

JO - World Development

JF - World Development

SN - 0305-750X

ER -