Date of Graduation

Spring 5-18-2018

Document Type

Thesis

Degree Name

Master of Science in International and Development Economics (MSIDEC)

College/School

College of Arts and Sciences

Department/Program

Economics

First Advisor

Yaniv Stopnitzky

Abstract

Peruvian agriculture is estimated to be subject to the greatest impacts of climate change in South America. Resulting shifts in rainfall patterns and extreme temperature realizations impose more frequent abnormal weather shocks on farmers and their production decisions. I study the impact of such shocks on agricultural practice choices of farmers growing two main staples, maize and potato; namely, I analyze adoption of practices reducing soil degradation, practices aimed towards water conservation, and application of inorganic fertilizer. I utilize unique cross-sectional data from Peru National Agricultural Survey over the years 2014 to 2016 in conjunction with long-term climate data, and construct georeferenced shocks posed by unusual rainfall levels as well as unusual variation by using a novel approach in the literature. I then apply fixed effects estimation to analyze how experienced shocks and, plausibly, changed perception regarding the riskiness of their environment affect farmers’ choice of practices over an agricultural year following a shock(s). My analysis shows that soil practices’ adoption is not sensitive to previous year’s shocks but increases after multiple years abnormal rainfall, while rate of fertilizer users goes up by 7 to 9 percentage points following a drought year. Use of water conservation measures decreases drastically after years of abnormally high rainfall or low variability of it. I find limited heterogeneities in responses.

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