The heterogeneous effects of adoption of climate-smart agriculture on household welfare in Pakistan
Muhammad Faisal Shahzad, Awudu Abdulai
Abstract
In this study, we analyse the heterogeneity in the impacts of adoption of climate-smart agricultural (CSA) practices on welfare indicators such as food and nutrition security and poverty reduction in Pakistan. We employ the marginal treatment effects (MTE) approach to estimate the treatment effects heterogeneity and policy-relevant treatment effects (PRTE). The findings show substantial heterogeneity in benefits from adoption of CSA with respect to both observed and unobserved household characteristics. In particular, the estimates show that households with higher unobserved benefits are more likely to adopt CSA practices. The empirical results show that adoption of CSA practices significantly reduces household food insecurity and increases household dietary diversity but reduces the poverty headcount and severity of poverty of the households at the lower level of unobserved resistance to adoption. The PRTE indicate that sources of climate change information and climate-resilient trainings could help to reduce rural poverty and improve food and nutrition security in Pakistan.