Distributional Implications of Climate Change in Rural India: A General Equilibrium Approach

22 Pages Posted: 15 Apr 2020

See all articles by Hanan G. Jacoby

Hanan G. Jacoby

World Bank - Agriculture and Rural Development Department; World Bank - Development Research Group (DECRG)

Mariano Rabassa

World Bank

Emmanuel Skoufias

World Bank

Date Written: July 2015

Abstract

We develop a general equilibrium framework, based on a specific‐factors trade model, to quantify the medium‐term household welfare impacts of global warming in rural India. Using an hedonic approach grounded in the theory combined with detailed microdata, we estimate that three decades of warming will reduce agricultural productivity in the range of 7%–13%, with the arid northwest of India especially hard hit. Our analysis shows that the proportional welfare cost of climate change is likely to be both modest and evenly distributed across percentiles of the per capita income distribution, but this latter conclusion emerges only when the flexibility of rural wages is taken into account.

Keywords: Agriculture, global warming, hedonic regression, trade

Suggested Citation

Jacoby, Hanan G. and Rabassa, Mariano and Skoufias, Emmanuel, Distributional Implications of Climate Change in Rural India: A General Equilibrium Approach (July 2015). American Journal of Agricultural Economics, Vol. 97, Issue 4, pp. 1135-1156, 2015, Available at SSRN: https://ssrn.com/abstract=3574240 or http://dx.doi.org/10.1093/ajae/aau084

Hanan G. Jacoby (Contact Author)

World Bank - Agriculture and Rural Development Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/hjacoby

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Mariano Rabassa

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Emmanuel Skoufias

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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