Doctoral Dissertation Research in Economics: Belief Formation and Adaptation to Climate Change

Climate change poses an existential crisis to hundreds of millions of the world’s poor, threatening both their livelihoods and lives. These households—often out of reach of government support—must take steps themselves to address the dramatic shifts already occurring in their local environments. Appropriate reaction therefore relies not only on access to the right tools to respond to the harmful effects of global warming but also on the knowledge to implement these measures in the first place.

Yet several characteristic features of climate change, such as the small, incremental steps through which the environment evolves, make learning in this domain particularly challenging. This research project will explore these frictions to belief formation using new survey data among farmers in rural areas and test the extent to which they inhibit people's capacity to adjust to the environmental changes around them.

Using an experiment correcting farmers’ beliefs about the harmful consequences of global warming on their own plots, this project will evaluate the scope for a low-cost policy to improve technological adaptation. The results of this project will contribute to our understanding of how individuals adapt to climate change, and the new datasets measuring both beliefs and the incidence of environmental shocks will be made freely available to other researchers.

This project will delve into farmers’ underlying mental models to understand how these households update about decision-relevant features of their local environment that have been impacted by global warming. Increased soil salinity threatens to dramatically reduce crop production without shifts in irrigation techniques and seed choice. Like with many dimensions of climate change, learning about rising soil salinity presents significant challenges: the underlying causal process is opaque (impacted by rising sea levels, depleting groundwater reserves, and increasing flooding) and changes often happen incrementally embedded in seasonal patterns.

Economic theories of limited attention suggest that small shifts will remain neglected, generating mistaken underestimation of true salt levels. This project will elicit quantitative beliefs among farmers about salinity on their plots to provide direct measurement of expectations about their local environment. Using natural experiments in salt levels due to the interaction of flooding and water salinity calculated using recent advances in remote sensing, this project will test mental models of belief formation by assessing which signals trigger updating by farmers.

By randomly providing information based on direct soil salinity measurements from farmers’ own plots, this project will measure the elasticity of technological adoption with respect to beliefs, providing an evaluation of a low-cost policy to improve adaptation to climate change.

This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.