Investigating Welfare Effect of Climate Change on the Wheat Products in Iran

Abstract

Agricultural sector will be most affected by climate change due to its extensive interaction with the environment. and as a result of changing production conditions, community welfare is changed. This study attempted at understanding the welfare effects of changes in climate parameters on the wheat product. Therefore, the yield functions were initially estimated. Supply, demand and import functions were secondly estimated by Simultaneous equations system. Finally, to study the welfare effects resulting from changes in temperature and precipitation, a price-endogenous mathematical programming model in three different scenarios of climate was used. The results showed that in the case of reducing precipitation with increasing temperature, consumer surplus, producer surplus and therefore society surplus will be reduced . Loss of welfare for consumers are higher than what is for producers.

Keywords

• Climate change
• Climatic zoning
• Wheat
• Panel data
• Price-endogenous model