Environmental Change, Water Scarcity and Farmers’ Differentiated Adaptations: Evidence from the Three Gorges Dam

52 Pages Posted: 22 Mar 2021 Last revised: 25 Aug 2022

See all articles by Ting Chen

Ting Chen

Hong Kong Baptist University - Department of Economics

Chong Liu

Peking University

Sen Ma

University of Illinois at Urbana-Champaign, Department of Economics; Jinan University - Institute for Economic and Social Research

Date Written: August 20, 2022

Abstract

Using the 2003 initial impoundment of the world's largest hydroelectric dam — China’s Three Gorge Dam — as a natural experiment, we assess how rural households with varying endowments adapted to the dam-induced water scarcity in the affected area. We first identify a persistent 12% reduction in rice yields in the downstream area where the water scarcity hits most. More importantly, the reduction of yield persists over 10 years after the initial shock suggesting the lack of median-long term adaptation of farmers. In response to the persistent shock on yield, local residents who were wealthier (measured by the size of farmland) compensated by migrating out for non-agricultural activities (31% more likely); while disadvantaged residents increased their acreage of rice cultivation by 22%. Our study confirms one main obstacle to farmers' adaptation to the major climate-environmental shock — the wealth constraint for out-migration.

Keywords: Climatic and Environmental Change, the Three Gorges Dam, Adaptation, Agricultural Production, Non-agricultural Activities

JEL Classification: O13 Q12 Q15

Suggested Citation

Chen, Ting and Liu, Chong and Ma, Sen, Environmental Change, Water Scarcity and Farmers’ Differentiated Adaptations: Evidence from the Three Gorges Dam (August 20, 2022). Available at SSRN: https://ssrn.com/abstract=3789033 or http://dx.doi.org/10.2139/ssrn.3789033

Ting Chen (Contact Author)

Hong Kong Baptist University - Department of Economics ( email )

WLB 518, 34 Renfrew Road
Kowloon Tong
Hong Kong, Hong Kong NA
Hong Kong

Chong Liu

Peking University ( email )

5 Yiheyuan Road, Haidian District
Beijing, Beijing 100871
China

Sen Ma

University of Illinois at Urbana-Champaign, Department of Economics ( email )

214 David Kinley Hall
1407 W. GREGORY
Urbana, IL Illinois 61801
United States

Jinan University - Institute for Economic and Social Research ( email )

601 West Whampoa Road
Tianhe District
Guangzhou, 510632
China

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