An analysis of the impact of climate change on crop yields and yield variability

This paper develops an econometric model of stochastic production functions to quantify the impacts of climatic variables on the mean, variance, and covariance of crop yields. The estimates of the production function parameters and their elasticities are utilized to analyse the impacts of the projected climate change on agriculture. The results show that the climate change will have modest effects on the mean crop yields, but will significantly reduce the variance and covariance for most of the crops considered. The results have implications for allocations of agricultural land among crops and for crop production mix.