Accounting for adaptation in assessing impact of climatic variations on crop yields: an empirical study of Arizona
The goal of this paper is to analyze the impacts of climatic variation around current normals on crop yields and explore corresponding adaptation effects in Arizona, using a unique panel data. The empirical results suggest that both fertilizer use and irrigation are important adaptations to climate change in crop production. Fertilizer use has a positive impact on crop yields as expected. When accounting for irrigation and its interaction with temperature, a moderate temperature increase tends to be beneficial to both cotton and hay yields. The empirical model in this paper features with two methodological innovations, identifying the effects of temperature change conditional on adaptations and incorporating potential spatial spillover effects among input use.