Wednesday
02
MAY

02:30 PM

Gamble on Rains :

The short and long-term effects of monsoon rainfall in India's agricultural sector

Dr. Matthias Hertweck

This paper examines the dynamic effects of Monsoon rainfall shocks on output, wages, and prices in the Indian agricultural sector. We find that the effects are highly asymmetric. Local (regional) droughts lead to a substantial (enormous) decline in local output, whereas local (regional) abundant rainfall has no (small negative) effects. The drop in local output is very short-lived, but elicits a persistent decline (increase) in wages (food prices) after a regional drought. Local droughts only affect wages, but not prices. Moreover, the impact on real income varies greatly across different social groups (e.g. landowners, cultivators, sharecroppers, or agricultural wage workers).

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