Weather shocks' impacts on farm-level agricultural outcomes in Bolivia

This paper studies how weather shocks affect agricultural outcomes in Bolivia at the farm-level. Using micro-data from the Bolivian Agricultural Survey of 2008 and 2015, satellite climate data, and a municipality level fixed effects model, we show that weather shocks, such as extreme temperature and extreme rainfall shocks have detrimental effects on Bolivian farmers’ yield. We also study how farmers cope with short-run weather extreme variations. We present our results differentiating by the climate risk areas and the geographic regions of Bolivia. On average, farmers that live in highlands municipalities experience greater reductions in yields and farmers that live in flood-prone municipalities increase the within farm labor supply in agricultural activities to cope with weather shocks. Our findings could orient policies toward mitigating the short-run implications of weather extreme variations.