Agriculture, Dams, and Weather

Abstract

The first chapter investigates whether construction of the Bureau of Reclamation dams in the early twentieth century raise farm values and increase agricultural output? I construct a new county level panel data set from 1890 to 1920 with information on geography, climate, politics, agriculture, and major dams and then evaluate the effect of the Bureau of Reclamation dams on the value of farms and on crop productivity. Using fixed effect panel estimation, I find that new federal dam construction increased the average value of farm land by approximately 6.4 percent. When I apply an instrument to control for potential endogeneity, the effect of Bureau dams on the farm land value increases in size, although the estimate is no longer statistically significant. When examining the crop output, the only crop for which the dams had effects was alfalfa. In the second chapter I investigate the effect of the geographic, economic and political factors on dam construction at the beginning of the Bureau of Reclamation's operation in the American West. Applying county level data which has been linked from various data sources for the time period of 1900 to 1910, I show that the percentage of votes for Republicans in presidential elections has a significant and positive effect on major dam construction. The last chapter investigates the effect of climate change on US agriculture using county-level data from 1997 to 2007. Compared to previous contributions, we pay particular attention to the spatial heterogeneity across the climate zones and include the presence of extreme weather events. The lack of consideration for both effects may have led previous works to generate biased estimates and incorrect impact forecasts. While current approaches use projected climate variables derived from coarse resolution Global Climate Models (GCMs), we use data at a much finer resolution by relying on dynamically downscaled simulation data. Further, we pay particular attention to the spatial heterogeneity in the impact of climate among the climate zones. Chow-Wald tests indicate the presence of significant heterogeneity across zones in the effects of climate on land values.