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Integrating Climate Predictions and Ricardian Results

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Presentation on theme: "Integrating Climate Predictions and Ricardian Results"— Presentation transcript:

1 Integrating Climate Predictions and Ricardian Results
Accra 2012

2 Linear Ricardian Model
NR=b0 +b1T+b2T2 +b3P+b4P2 Marginal calculation dNR/dT=b1+2b2T dNR/dP=b3+2b4P For each district, different value of T and P Therefore different marginal values

3 Loglinear Ricardian Model
Log(NR)=b0 +b1T+b2T2 +b3P+b4P2 Marginal calculation dlog(NR)/dT=(dNR/NR)/dT=b1+2b2T dlog(NR)/dP=(dNR/NR)/dP=b3+2b4P Measures percentage change in NR For each district, different value of T and P Therefore different marginal values

4 Climate Prediction Climate model predicts change in temperature (ΔT) and percentage change in precipitation (Δ%P) in specific year and place

5 Use Model to Predict Change in Net Revenue
Estimate initial net revenue NR0=∑Li * (b0 +b1T0 +b2T02+ b3P0 +b4P02) Estimate future net revenue NR1=∑Li * (b0 +b1T1 +b2T12+ b3P1 +b4P12) Change in net revenue ΔNR=NR1-NR0


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