Adapting to climate change accounting for individual beliefs

• 成果类型: Article
• 署名作者: Zappala, Guglielmo
• 署名单位: University of California System; University of California Santa Barbara; University of California System; University of California Santa Barbara; Paris School of Economics
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2024.103289
• 发表日期: 2024
• 关键词: adaptation; agriculture; bangladesh; beliefs; climate change; drought; irrigation

摘要

As the climate changes, efficient climate policy requires a better understanding of how individuals adapt. Despite extensive research on various climate adaptation frictions, including financial and technological constraints, models of adaptive decision -making assume that agents have perfect information and accurate beliefs about climate. Combining rural household data in Bangladesh with a meteorological measure of dryness, this paper studies the role of individual drought beliefs and their accuracy in irrigation decisions as a key adaptive margin. In a theoretical model, I introduce a behavioral friction to document how heterogeneous beliefs differentially influence responsiveness to the same meteorological signal in dryness. The empirical analysis reveals an asymmetric response to dry shocks in irrigation conditional on the accuracy of prior beliefs. A counterfactual analysis shows lower technology adoption levels and higher monetary losses when beliefs are inaccurate.