Abstract
Climate change is impacting agriculture, making it more difficult to grow crops and raise animals. Adaptation is necessary to maintain our agricultural production. To correctly estimate the economic impact of climate change on agriculture, adaptation of farmers should be considered. This is done by the Ricardian method, measuring long run impacts from climate change and capturing the adaptation that farmers have already demonstrated they can do. To support decision making by policy makers and farmers, it is needed to open the black box of adaptation and explicitly model the adaptation choices of farmers. Therefore, this project will simultaneously estimate choices (e.g. farm type, crop type, irrigation or rainfed) and income, conditional on the explicit adaptation choices. Next, a new climate-change-adaptation valuation approach will be developed by including future adaptation choices. The current Ricardian approach only takes existing adaptation options into account (revealed by 'real' farm data). Future adaptation options can be captured by providing hypothetical market scenarios to farmers (and as such measure their stated preferences). The joint estimation of existing and future adaptation options will provide the first reliable measure of the economic benefit of climate-change adaptation.
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