The Welfare Cost of Climatic Variability: A Subjective Well-Being Approach

The Welfare Cost of Climatic Variability: A Subjective Well-Being Approach

RFF Internal Seminar

Presenter
Yonas Alem, University of Gothenburg 

Abstract
Using a unique dataset combined of two rounds of panel data from rural Ethiopia - a country categorised as highly vulnerable to climate change and variability - and a new dataset containing 33 years of daily atmospheric parameters, we investigate the impact of climate variability on the subjective well-being of farmers. Reduced-form results from alternative nonlinear and linear panel data models indicate that increased risk, based on historical rainfall variability, significantly reduces subjective well-being. In contrast to previous studies, and in line with a more recent school of thought, we observe that long-run climate averages have no effect on subjective well-being. Policies that reduce dependence on rain-fed agriculture, improve the ability of farmers to deal with climatic risk, and provide credible insurance may be welfare enhancing.

Date
Friday, March 22, 2013
12:00 - 1:00 p.m. Lunch will be provided. Location
7th Floor Conference Room
1616 P St. NW
Washington, DC 20036 All seminars will be in the 7th Floor Conference Room at RFF, 1616 P Street NW. Attendance is open, but involves pre-registration no later than two days prior to the event. For questions and to register to an event, please contact Khadija Hill at [email protected] (tel. 202-328-5174). Updates to our academic seminars schedule will be posted at www.rff.org/academicseminarseries.