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.
| Original language | English |
|---|---|
| Pages (from-to) | 13-32 |
| Number of pages | 20 |
| Journal | World Development |
| Volume | 112 |
| Early online date | 9 Aug 2018 |
| DOIs | |
| Publication status | Published - Dec 2018 |
Funding
We thank Kalle Hirvonen, Michael Bosilovich, Nicholas Novella, Suhung Shen, the World Bank LSMS Team, the FAO RIGA Team as well as participants at the Fourth SITES-IDEAs Annual Conference on Development Topics, at the 58th SIE Annual Scientific Meeting and at the 2017 ICID-IFAD Workshop on International Development. We are also grateful to two anonymous referees for their helpful suggestions. All errors and opinions are ours.
Keywords
- Climate change
- Household consumption growth
- Rural development
- Weather shocks
