Climate change can increase pest migration and outbreaks by altering pest life cycles and habitats, leading farmers to use more pesticides. This article evaluates the economic benefits of farmer networks for pest management using a social learning model applied to a pilot network in Iowa. Results show significant variation in effectiveness, with networks offering over $600 per acre in value for farmers facing high pest infestation risks due to extreme heat. (Link to CARD working paper)
Can societies adapt to more frequent and intense weather disasters? This paper estimates the value and limit of disaster adaptation in Northeast Brazil, a semi-arid region prone to droughts. It examines the effects of drought frequency and reservoir construction on economic and population outcomes. Using a dataset replicating Brazil's river network and monitoring stations, the study identifies the impact of drought frequency and the adaptation value of reservoirs. Findings show that reservoirs significantly offset drought impacts, improving GDP per square kilometer by 27% and population density by 26%. However, the benefits decline to zero at three droughts per decade. Reservoirs support subsistence agriculture, increasing vulnerability but also accelerating rural-urban migration, enhancing resilience.
This study examines how trade liberalization affects the impact of road infrastructure on economic development in Brazil. Using a triple-differences framework and instrumental variables, it finds that road expansion post-trade reform increases population and GDP per capita in high soybean potential areas. Additionally, road expansion boosts soybean harvested area and yield in these regions, highlighting the role of export-led agricultural growth in economic development.
This study examines the impact of technology diffusion, specifically genetically modified and nitrogen-fixing soy, on agricultural supply in Brazil. Using data from 1.5 million farms, it estimates price effects on soy acreage expansion from the 1996 and 2006 agricultural censuses. Findings show that acreage response functions are more elastic near the agricultural frontier due to technological diffusion. The adoption of nitrogen-fixing soy, which converts marginal savanna pastureland to soy production, largely explains this heterogeneity. The long-run price elasticity of soy acreage is 0.6 in the south and 1.8 in the savanna. Near the savanna-Amazon border, a 10% permanent increase in soy prices could convert 1 million hectares of natural vegetation to farmland.
Technological advances in the 1970s and 1980s enabled soybean cultivation in the Brazilian Savanna, but regional constraints limited adoption. Post-macroeconomic reforms, international traders introduced contracts bundling technology, finance, inputs, and market access. Analysis of farm-level data shows these contracts led to rapid technological diffusion, agricultural expansion, and a 10-fold increase in productivity by converting marginal land to soybean plantations.