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Integrating Climate Predictions and Ricardian Results

Integrating Climate Predictions and Ricardian Results. Accra 2012. Linear Ricardian Model. NR=b0 +b1 T+b2T 2 +b3P+b4P 2 Marginal calculation dNR/dT=b1+2b2T dNR/dP=b3+2b4P For each district, different value of T and P Therefore different marginal values. Loglinear Ricardian Model.

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Integrating Climate Predictions and Ricardian Results

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  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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