Resilience to Climate Change: Spatial Ricardian Analysis

This chapter provides practical and theoretically founded indications concerning the spatial econometric assessment of climate impacts, focusing specifically on the case of agriculture. The chapter, after introductory considerations, starts by dealing with measurement issues about climate change and weather extremes, and related suggestions about sample selection and the choice of the weather indicators. The Ricardian approach to climate resilience of the agricultural sector is then introduced, along with motivations behind a spatial Ricardian approach that allows for spatial autocorrelation. Modelling strategy issues are touched upon, concerning model selection and the spatially weighted matrix. Next, a review of the spatial Ricardian approach describes the key works that estimated spatial spillovers of weather events. A critical discussion closes the chapter. The discussion focuses on the information content that econometric estimates can provide on adaptation practices, as well as on the possible integration between spatial econometrics and agent-based computational projections of the climate-economy nexus.