Climate, Water, and Agriculture

Robert Mendelsohn and Ariel Dinar

Abstract

This study explores the interaction between climate, water, and agriculture. We test whether surface water withdrawal can help explain the variation of farm values across the United States and whether adding these variables to the standard Ricardian model changes the measured climate sensitivity of agriculture. The paper finds that the value of irrigated cropland is not sensitive to precipitation and increases in value with temperature. Finally, the paper finds that sprinkler systems are used primarily in wet cool sites, whereas gravity and especially drip systems help compensate for higher temperatures. These results indicate that irrigation can help agriculture adapt to global warming. (JEL Q2, Q15)

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