Will U.S. Agriculture Really Benefit from Global Warming? Accounting for Irrigation in the Hedonic Approach

摘要

There has been a lively debate about the potential impact of global climate change on U.S. agriculture. Most of the early agro-economic studies predicted large damages (see, for example, Richard M. Adams, 1989; Harry M. Kaiser et al., 1993; Adams et al., 1995). In an innovative paper Robert Mendelsohn, William D. Nordhaus and Daigee Shaw (1994), hereafter MNS, propose a new approach: using the variation in temperature and precipitation across U.S. counties to estimate a reduced-form hedonic equation with the value of farmland as the dependent variable. A change in temperature and/or precipitation is then associated with a change in farmland value, which can be interpreted as the impact of climate change. Adams et al. (1998) characterize the hedonic approach as a spatial analogue approach. They acknowledge that "the strength of the spatial analogue approach is that structural changes and farm responses are implicit in the analysis, freeing the analyst from the burden of estimating the effects of climate change on particular region-specific crops and farmer responses." One of the potential disadvantages, however, of the hedonic approach is that it is a partial equilibrium analysis, i.e., agricultural prices are assumed to remain constant.