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On the Distributional Implications of Climate Change: A Methodological Framework and Application to Rural India


  • Hanan Jacoby, Lead Economist (DECRG)
  • Emmanuel Skoufias, Lead Economist (PRMPR)
  • Mariano Rabassa, Consultant (PRMPR) 

Description: Climate change will severely depress productivity in developing country agriculture, a sector upon which much of the world’s poor depend.  Though a large literature attempts to quantify the economic costs to agriculture as a whole, there has been little, if any, effort to understand how these potential losses will be distributed across households and how the poor will fare in particular.  In this BBL, we present a methodological framework for tracing out the consequences of climate change for poverty and income distribution in the rural economy.  We propose a two step approach, first estimating the impact of climate on the returns to land and labor, and then constructing, from these returns and household baseline characteristics, a counter-factual measure of household income (consumption) under alternative climate change scenarios.  We will also present preliminary results of an application of our approach to rural India using nationally representative data from the National Sample Survey (NSS).


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