Three Economic Essays on Climate Change Impacts and Adaptation in Africa’s Agricultural Sector

Abstract

How does climate change affect Africa's agricultural sector, and how do households and individuals respond to these challenges? This dissertation presents three empirical investigations of these fundamental questions, offering new evidence on both the impacts and the mechanisms through which households adapt. Drawing on rich microdata from Ethiopia and Tanzania, combined with satellite weather information, the studies uncover important insights about climate impacts and adaptation in Africa's agricultural sector.<br/> The first essay demonstrates that rural households actively reshape their economic lives in response to drought shocks. Analyzing Ethiopian panel data, the study shows that both short-term and persistent droughts trigger a significant reallocation of labor from farming to off-farm self-employment — a shift that helps households smooth consumption and maintain food security. This adaptation is particularly pronounced among households with access to financial services, revealing how financial inclusion shapes adaptive capacity. <br/>The second essay investigates how rising temperatures undermine agricultural productivity through resource misallocation, a previously undocumented but important impact channel. Using detailed plot-level crop farming data from Tanzania, the study provides new evidence that exposure to high temperatures above 30°C exacerbates distortions in land and capital allocation, reducing aggregate productivity. However, secure private property rights can substantially mitigate these temperature-induced inefficiencies, highlighting how institutional reforms in the land market can enhance resilience to the climate impacts. <br/>The third essay establishes a causal link between human capital accumulation and climate change adaptation. Exploiting the expansion of education access due to the introduction of free primary education in Ethiopia, the study finds that additional years of formal education significantly increase the adoption of climate-resilient farming practices and technologies. These findings underscore the crucial role of human capital in the global response to climate change, particularly in low-income countries, by helping the most vulnerable to understand and address its impacts. <br/>Collectively, this dissertation advances our understanding of the impacts of climate change and adaptation in Africa’s agricultural sector, offering crucial evidence to design integrated policies that strengthen institutional frameworks, expand economic opportunities, and build human capital to enhance adaptation.