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Forecasting the impacts of climate variability: lessons from the rainfed corn market in Ceará, Brazil

Published online by Cambridge University Press:  01 April 2008

ARIASTER B. CHIMELI ,
FRANCISCO DE ASSIS DE SOUZA FILHO ,
MARCOS COSTA HOLANDA  and
FRANCIS CARLO PETTERINI
ARIASTER B. CHIMELI
Affiliation:
Ohio University, Department of Economics, Bentley Hall Annex, Athens, OH 45701. Email: [email protected]
FRANCISCO DE ASSIS DE SOUZA FILHO
Affiliation:
International Research Institute for Climate and Society, Columbia University
MARCOS COSTA HOLANDA
Affiliation:
Instituto de Pesquisa e Estratégia Econômica do Ceará
FRANCIS CARLO PETTERINI
Affiliation:
Instituto de Pesquisa e Estratégia Econômica do Ceará
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Abstract

A number of studies show that climatic shocks have significant economic impacts in several regions of the world, especially in, but not limited to, developing economies. In this paper we focus on a drought-related indicator of well-being and emergency spending in the Brazilian semi-arid zone – rainfed corn market – and estimate aggregate behavioral and forecast models for this market conditional on local climate determinants. We find encouraging evidence that our approach can help policy makers buy time to help them prepare for drought mitigating actions. The analysis is applicable to economies elsewhere in the world and climatic impacts other than those caused by droughts.

Type
Research Article
Information
Environment and Development Economics , Volume 13 , Issue 2 , April 2008 , pp. 201 - 227
Copyright
Copyright © Cambridge University Press 2008

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