Essays On The Economics of Agriculture, Information, and Climate Change
Agricultural practices are increasingly dependent on precise, real-time weather information. Irrigation, pest management, and even strategies for climate change adaptation require adequate information inputs. This dissertation starts with a valuation of weather information in California, assessing some of the the economic gains from the California Irrigation Management Information System (CIMIS). This system of weather stations and information portal was intended for water saving in irrigation, but turned out to have many unexpected uses. The next chapter uses CIMIS historical information to estimate the yield response of California pistachios to warm winters. This has been an ongoing challenge in the literature, as the available yield data are scarce and noisy. Merging them with CIMIS data is essential in estimating this response, and for predicting the yield effects of winter temperatures in the future. The last builds on these predictions, and analyzes the potential gains from a technology that could deal with the challenge of warming winter days: spraying the dormant trees with kaolin clay, which reflects part of the sunlight and keeps the trees cooler. To assess the gains, I take the estimated response function, climate predictions, and other variables to market model that is solved numerically and allows for welfare gain calculations. Beyond the potential of this specific technology for pistachios, tweaking temperature distribution tails seems like a promising concept for climate change adaptation. Many temperature challenges brought by climate change are in these distribution tails, where yield responses are often non-linear. This means that small temperature adjustments, local in time and place, might suffice for cost-effective adaptation strategies. I call this concept ``Micro-Climate Engineering'', and predict that such practices will be increasingly popular with the progression of climate change.