Climate Change and Agriculture: Subsistence Farmers’ Response to Extreme Heat
Fernando M. Aragón, Francisco Oteiza, Juan Pablo Rud
Abstract
This paper examines how subsistence farmers respond to extreme heat. Using microdata from Peruvian households, we find that high temperatures reduce agricultural productivity, increase area planted, and change crop mix. These findings are consistent with farmers using input adjustments as a short-term mechanism to attenuate the effect of extreme heat on output. This response seems to complement other coping strategies, such as selling livestock, but exacerbates the drop in yields, a standard measure of agricultural productivity. Using our estimates, we show that accounting for land adjustments is important to quantify damages associated with climate change. (JEL O12, O13, Q11, Q12, Q15, Q54)