Abstract: The Ricardian model is a widely used approach based on cross-sectional regression analysis to estimate climate change impacts on agricultural productivity. Up until now, researchers have focused on the impacts of gradual changes in temperature and precipitation, even though climate change is known to encompass also changes in the severity and frequency of extreme weather events. This research investigates the impact of heatwaves on European agriculture, additional to the impact of average climate change. Using a dataset of more than 60,000 European farms, the study examines whether adding a measure for heatwaves to the Ricardian model influences its results. We find that heatwaves have a minor impact on agricultural productivity and that this impact is moderated by average temperature. In colder regions, farm productivity increases with the number of heatwave days. For warmer regions, land values decrease with heatwave frequency. Despite the moderating effect, the marginal effect of heatwave frequency, i.e. the percentage change in agricultural land values caused by one more heatwave day per year, is small in comparison to the effect of average temperature increases. Non-marginal effects are found to be relevant, but only in the case of increased heatwave frequency. According to our results, farms are not expected to suffer more from extreme weather than from mean climate change, as was claimed by several previous studies.

Abstract: This study evaluates the effects of climate change on the net revenue of farmers in Japan. We adopted the Ricardian model, which implicitly accounts for farmers’ full adaptation. The main findings of this study are as follows. First, the Ricardian regression shows that changes in temperature significantly impact farmers’ net revenue. In contrast, changes in precipitation have limited effects on farmers’ net revenue. The results of future predictions showed that the effects of climate change are positive across the country, with varying degrees between north and south. These results are more optimistic than those in the existing literature, which frequently reveal negative climate change impacts in southern Japan. However, it should be noted that this model assumes full adaptation and does not consider the transition costs of farmers, and understanding the actual adaptive measures is an important remaining issue.