Date of Award

Spring 5-2-2017

Degree Type

Report

Degree Name

Master of Science (MS)

Department

Applied Economics

First Advisor

Eric Edwards

Second Advisor

Man-Keun Kim

Third Advisor

Ryan Bosworth

Abstract

Scientific evidence suggests that future climate change has the potential to bring about an increase in both the frequency and duration of drought in some regions of the world (United Nations, 2012). Economists have theorized that at least some of the adverse effects of these droughts will be mitigated through various adaptive responses by agricultural producers. The effectiveness of any adaptive response to climate change will depend on how quickly producers can recognize a change in climatic patterns and respond accordingly. The following paper investigates the relationship between a specific climate signal (prolonged drought) and the land use decision of a farmer. To accomplish this, we track changes in land use for roughly 50,000 farmers for 5 consecutive years in western Kansas. Using a two-way fixed effect model, we find a statistically significant negative association between drought and the decision to plant corn, a relatively more water intensive crop. However, the magnitude and statistical significance of these findings are quite sensitive to model specification. In addition, although statistically significant, the magnitude of this relationship appears to be small, suggesting that the pace of climate change adaption, with respect to drought and crop choice, may be quite gradual.

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