The Impact of Heat Waves on Agricultural Labor Productivity and Output

This chapter analyzes the impact of heat waves on the productivity of selected crops in California's agricultural sector. We use a panel data ensemble to estimate the impact of heat waves on agricultural labor and the subsequent impact on crop productivity. Data used include crop prices, acreage harvested, crop labor requirements, production costs, capital, and the heat index. The counties included in the study are Fresno, Yolo, Kern, San Joaquin, and Imperial. Our results indicate that the impact of heat waves on a relatively labor-intensive crop such as watermelons can be significant because an increase in the number of days that exceed the range of 95OF to 100OF to over 100OF results in productivity decreases on the range of 4% to 6%. For onions our results indicate that the decline in productivity is less but significant in terms of dollar amounts. Our research is an improvement on previous studies that have analyzed the impact of temperature on agricultural production in that our framework isolates the impact of heat on labor first and then incorporates it into a production function instead of using temperature as a regression variable directly, which could result in spurious outcomes. Our method complements other studies that have analyzed the impact of extreme temperatures on crop productivity and using an agronomic modeling approach.