The Effect of Climate Change over Agricultural Factor Productivity: Some Econometric Considerations

This paper examines the role that climate change might be playing in the declining returns to agricultural research. For this purpose, we estimate a cross-section time-series model of agricultural total factor productivity for the U.S. states over the period 1970–1999, with the inclusion of climatic variables, and controlling for non stationarity of the data. Our findings suggest that after controlling for climatic variables and non stationarity, the effect of Public Agricultural Research Capital over Total Factor Productivity is reduced.