Extreme Heat and Agricultural Adaptation: Evidence from Rural Households in China

Speaker：TANG Qu（Assistant Professor, Jinan University）

Host：HOU Chenxue, Assistant Professor, Lingnan College

Time and Date：14:30-17:30, Dec. 31, 2021

Venue: Room 202, MBA building

Language: English + Chinese

Abstract:

More extreme heat events are expected under climate change, posing threats to food production as well as the lives of agriculture-dependent rural households. Using a decade-long panel of rural households in an agricultural region of China, we find extreme heat substantially decreases corn production and lowers households' economic returns from agriculture. However, the households successfully smooth their consumption contemporaneously by utilizing corn stocks and liquid financial assets, and their future expenditures are unaffected, except for having increased their insurance purchases in the long run. Besides, induced productive adjustments are limited within the growing season, partly due to existing liquidity constraint and knowledge gap. Some suggestive evidence indicates that, in the intermediate run, the households adjust their crop mix toward a more diverse but less risky portfolio.