Essays on Environmental and Behavioral Economics
Current PhD dissertation consists of three essays. The first essay studies the economic impact of climate change on agriculture. Titled as "Climate Sensitivity of Crops Revenue and Adaptation: A Ricardian and Endogenous Switching Analysis of Farms in the Central Highlands of Afghanistan", the first essay uses 34 years of daily weather information and detailed household data (including annual farm revenue, the annual cost of farming, and adaptation) from 1502 farming households to shed light on the sensitivity of crops net revenue to climate factors. By understanding the sing, significance, and the magnitude of the coefficients of the exogenous climate variables in the model, the first essay provides evidence on how changes in those climate factors would affect crops revenue. A Ricardian model is used for investigating the climate-crops revenue relationship. The traditional model is extended by explicitly considering the farmers’ adaptation. By employing an endogenous switching model, the essay contributes to the debate on the endogeneity of farmers’ adaptation. Past studies have been improved by systematically addressing the multicollinearity of climate factors. The likely impacts of future changes in the climate on corps revenue are analysed by combining the estimated model with future climate scenarios. The second essay—co-authored by Menusch Khadjavi—addresses the farmers’ risk preferences. Titled as "Exposure to Climate Change-Related Extreme Weather Events and Risk Preferences: Evidence from Farmers in Afghanistan", the second essay explores the association of farmers’ risk preferences and their exposure to extreme weather events, such as drought, flood, and cold/heatwaves. We use experimental and survey data from a total of 1741 farmers to shed light on the question of whether long–term exposure to extreme events affects farmers’ risk preferences. Additionally, we contribute to the growing debate on the endogeneity of risk preferences. The third essay — which is co-authored by Menusch Khadjavi—investigates farmers’ adaptation to climate change. Titled "Adaptation to Climate Change in Afghanistan: Evidence on the Impact of External Interventions", the third essay explores farmers’ perception of- and adaptation to climate change. Using quasi-experimental methods, the third essay further explores the role of external support in farmers’ adaptation.