The value of forecasts

Experimental evidence from India

Bibliographic Data

ID19081542
AuthorsFiona Burlig (corresponding author), Amir Jina (0000-0003-3446-7883), Erin Kelley (0000-0001-5001-5786), Gregory Lane, Harshil Sahai
Year2024
Publication date2024-02-01
Peer ReviewedYes
Open AccessNo
TypeREPORT
VenueNational Bureau of Economic Research (REPOSITORY)
PublisherNational Bureau of Economic Research (PUBLISHER)
DOI10.3386/w32173
OpenAlexW4392787849
LanguageEN
Citations received3
References cited2

Climate change increases weather variability, exacerbating agricultural risk in poor countries.Risk-averse farmers are unable to tailor their planting decisions to the coming season, and underinvest in profitable inputs.Accurate, long-range forecasts enable farmers to optimize for the season ahead.We experimentally evaluate monsoon onset forecasts in India, randomizing 250 villages into control; a forecast group receiving information well in advance of onset; and a benchmark index insurance group.Forecast farmers update their beliefs and their behavior: farmers who receive "bad news" relative to their priors substantially reduce land under cultivation and certain input expenditures, while those receiving "good news" significantly increase input expenditures.The forecast also impacts crop choice, as farmers tailor their investments.These investment changes meaningfully alter ex post outcomes.In contrast, insurance, which provides no information, increases investments but does not change crops.Our results demonstrate that forecasts are a promising tool for climate adaptation

Agricultural economics · Agriculture · Biology · Climate change · Climate change adaptation · Climatology · Developing country · Economic growth · Economics · Environmental resource management · Geography · Natural resource economics · Agricultural risk and resilience · Climate change impacts on agriculture · Climate Change Policy and Economics · Engineering · Environmental Science · Ecology · Geology

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