Expectations and climate change adaptation in low income countries

I plan to study how firms and households in low-income countries can adapt to climate change and increase their resilience to climate shocks. While productivity dynamics and investment are relatively well-researched in high-income countries, less evidence pertains to low-income countries where the scope to reduce the costs of climate change via these mechanisms is likely greater.

It is my ambition to address this by working to understand connections between climate change, productivity and investment by households and firms in low-income settings.

I am specifically interested in how agents' expectations influence their resilience to climate change. This interest stems from research I am co-authoring with John Van Reenen and Aureo de Paula, in which we propose a new production function estimator that leverages data on firms' subjective expectations. After gaining a thorough understanding of existing estimation techniques, I contributed to this project by deriving the moment condition we exploit for identification.

More broadly, the project drew my attention to expectations as a concept, which I pursued by participating in a workshop on the topic hosted by Charles Manski. Following these experiences, I am keen to examine how people acquire and weigh information from various sources when forming expectations and making decisions such as whether to invest in climate-resilient technology.

I am also interested in how uncertainty and risk mediate individuals' propensity to act on their expectations, for example how heterogeneity in risk aversion may lead to systematic differences in exposure to climate change between male- and female-headed households.

While the exact focus of my PhD will develop over the coming years, I plan to examine these topics using empirical methods. Specifically, I aim to combine reduced-form evidence on issues related to climate change adaptation with structural modelling of the underlying mechanisms to enable the counterfactual evaluation of policies.