Impact of climate change adaptation on farm productivity and household welfare

Abstract

<p>This paper examines how climate change adaptation impacts on farm productivity and the ability of households to accumulate assets in the context of a developing economy. We apply an endogenous switching regression to data obtained from 1440 farmers in Ghana. Our model, which accounts for endogeneity and selection bias, allows us to simultaneously determine the factors that influence maize farmers' decision to adapt to climate change and the productivity and household assets that result from both adaptation and otherwise. We estimate an inverse relationship between rainfall and the decision to adapt to climate change. As expected, we find that access to information has a positive effect on the decision to adapt. Farms that benefit from adaptation do not become less productive with increases in temperature or rainfall. Overall, we find that farmers who adapt to climate change are more productive and have more household assets than their counterfactual. Farmers who do not adapt obtain less yield and have less household assets than their counterfactual. These findings have important implications for policy.</p>