The dynamic effects of weather shocks on agricultural production

This paper proposes a new methodological approach using high-frequency data and local projections to assess the impact of weather on agricultural production. Local projections capture both immediate and delayed effects across crop types and growth stages, while providing early warnings for food shor...

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Bibliographic Details
Published in:Journal of environmental economics and management 2024-02, Vol.130, p.103078, Article 103078
Main Authors: Crofils, Cédric, Gallic, Ewen, Vermandel, Gauthier
Format: Article
Language:English
Subjects:
Agriculture
Economics and Finance
Humanities and Social Sciences
Local projections
VAR
Weather shocks
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Summary:This paper proposes a new methodological approach using high-frequency data and local projections to assess the impact of weather on agricultural production. Local projections capture both immediate and delayed effects across crop types and growth stages, while providing early warnings for food shortages. Adverse weather shocks, such as excess heat or rain, consistently lead to delayed downturns in production, with heterogeneous effects across time, crops, and seasons. We build a new index of aggregate weather shocks that accounts for the typical delay between event occurrence and economic recognition, finding that these shocks are recessionary at the macroeconomic level, reducing inflation, production, exports and exchange rates.
ISSN:0095-0696
1096-0449
DOI:10.1016/j.jeem.2024.103078