Publication

Many studies suggest that warming is harmful to American crop yields because of a temperature threshold near 30 degrees C whereupon yields abruptly fall. This study uses a flexible daily temperature bin specification in a Ricardian model to measure the response of farmland value to daily temperature. The analysis does not find evidence that high temperatures are particularly harmful to farmland or cropland value in the Eastern United States. Instead, temperature has a smooth hill-shaped effect on farmland value with a peak temperature of about 18 degrees C. Nonetheless, the Ricardian model predicts that cropland values would fall linearly by 15%/degrees C with uniform warming, while farmland values of mixed farms would fall far less.