Abstract

This paper examines the role of land rights and related institutions in coping with heat damage in agriculture. Leveraging the staggered 2011-2019 rollout land registry reform in Greece, we show that farmers receiving the registry offset most of the heat damage on crop yields. This pattern fully aligns with our theory indicating that more secure land rights shift farmers’ heat adaptation strategies from enlarging croplands to increasing other inputs (e.g., capital, labor, irrigation), ultimately reducing heat damage on yields. Our preferred estimates indicate that, indeed, farmers without the new registry respond to an additional degree day above 28°C by enlarging croplands from 0.2-0.4 percent, while farmers with the registry do not adjust along this margin. Conversely, farmers with the new registry increase their use of labor and irrigation by 0.7 and 0.2 percent per degree day respectively, while farmers without do not adjust along these inputs. In total, the reform is projected to offset at least two thirds of the agricultural productivity losses expected by 2100 in Greece, underlying the crucial role of institutions in reducing the costs of climate change by facilitating farmers’ adaptation.”

Co-authors : Liang Diao (Osaka University) et Huiqian Song (Kyoto University

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