The Use of Cross-Sectional Analysis to Measure Climate Impacts on Agriculture: Theory and Evidence

This article examines the methodological issues associated with using cross-sectional methods to study climate impacts on agriculture. In particular, we describe and address concerns that have been raised about this method, including missing variable bias, irrigation, prices, and carbon fertilization. We review cross-sectional studies of estimated climate impacts on agriculture around the world. These studies suggest that both temperature and precipitation have modest effects on farmland value and net revenue. The studies also suggest that marginal warming will likely be harmful in low latitudes but beneficial in higher latitudes and that marginal increases in rainfall will be beneficial in semiarid locations but harmful in very wet places. The impacts differ for rain-fed versus irrigated farms and for crops versus livestock. The results imply that global warming will likely have only modest impacts on global food production for the next century since the harm from higher temperatures will likely be offset by the benefits of carbon fertilization and adaptations by farmers.