Empirical modeling of agricultural climate risk.

Effective policies for adaptation to climate change require understanding how impacts are related to exposures and vulnerability, the dimensions of the climate system that will change most and where human impacts will be most draconian, and the institutions best suited to respond. Here, we propose a simple method for more credibly pairing empirical statistical damage estimates derived from recent weather and outcome observations with projected future climate changes and proposed responses. We first analyze agricultural production and loan repayment data from Brazil to understand vulnerability to historical variation in the more predictable components of temperature and rainfall (trend and seasonality) as well as to shocks (both local and over larger spatial scales). This decomposed weather variation over the past two decades explains over 50% of the yield variation in major Brazilian crops and, critically, can be constructed in the same way for future climate projections. Combining our estimates with bias-corrected downscaled climate simulations for Brazil, we find increased variation in yields and revenues (including more bad years and worse outcomes) and higher agricultural loan default at midcentury. Results in this context point to two particularly acute dimensions of vulnerability: Intensified seasonality and local idiosyncratic shocks both contribute to worsening outcomes, along with a reduced capacity for spatially correlated ("covariate") shocks to ameliorate these effects through prices. These findings suggest that resilience strategies should focus on institutions such as water storage, financial services, and reinsurance.

Risk and Return in Village Economies.

This paper provides a theory-based empirical framework for understanding the risk and return on productive capital assets and their allocation across activities in an economy characterized by idiosyncratic and aggregate risk and thin formal markets for real and financial assets. We apply our framework to households running business enterprises in Thai villages with extensive networks, taking advantage of panel data: income, assets, consumption, gifts, and loans. We decompose risk and estimate the risk premia faced by households, distinguishing aggregate risk from idiosyncratic, potentially diversifiable risk. This distinction matters for estimating measures of underlying productivity and has important policy implications.

Integrated Household Surveys: An Assessment of U.S. Methods and an Innovation.

We present a vision for improving household financial surveys by integrating responses from questionnaires more completely with financial statements and combining them with payments data from diaries. Integrated household financial accounts-balance sheet, income statement, and statement of cash flows-are used to assess the degree of integration in leading U.S. household surveys, focusing on inconsistencies in measures of the change in cash. Diaries of consumer payment choice can improve dynamic integration. Using payments data, we construct a statement of liquidity flows: a detailed analysis of currency, checking accounts, prepaid cards, credit cards, and other payment instruments, consistent with conventional cash-flows measures and the other financial accounts.

Heterogeneity and Risk Sharing in Village Economies.

We show how to use panel data on household consumption to directly estimate households' risk preferences. Specifically, we measure heterogeneity in risk aversion among households in Thai villages using a full risk-sharing model, which we then test allowing for this heterogeneity. There is substantial, statistically significant heterogeneity in estimated risk preferences. Full insurance cannot be rejected. As the risk sharing, as-if-complete-markets theory might predict, estimated risk preferences are unrelated to wealth or other characteristics. The heterogeneity matters for policy: Although the average household would benefit from eliminating village-level risk, less-risk-averse households who are paid to absorb that risk would be worse off by several percent of household consumption.

Measuring the Return on Household Enterprise: What Matters Most for Whom?

Return on assets (ROA) from household enterprise is crucial for understanding the well-being and productivity of households in developing economies. Yet the definition and measurement of household enterprise ROA remain inconsistent or unclear. We illustrate potential measurement problems with examples from various actual surveys. We then take advantage of a detailed integrated household survey to perform a robustness analysis, acting as if we had gathered less data than was actually the case, to see what matters and for whom. The three issues that matter most for accurate measurement of household enterprise ROA are the choice of accrual versus cash basis of income, the treatment of household's own labor in enterprise income, and the treatment of non-factor income. Also, this sensitivity matters most for a relatively poor region dominated by crop cultivation relative to a richer region with non-farm enterprises. Though the choice between accrued income and cash income matters less when the frequency of the data declines, there remains high sensitivity in longer-term and annualized data. We conclude the paper by providing recommendations on how to improve the survey questionnaires for more accurate measurement in field research.

Impact of Universal Health Care Coverage on patient demand for health care services in Thailand.

Fully implemented in Thailand in 2002, the Universal Health Care Coverage (UC) Program aimed to provide cheap access to health care services, for 30 baht (less than 1 U.S. dollar) per visit, to all uninsured Thais. In this paper, we studied the impact of the UC in Thailand on the demand for health care services using hospital level data. We found that the UC program was successful in increasing outpatient demand for health care, particularly the demand from the elderly and the poor. However, outpatient demand for health care dramatically increased during the first year of the program and faded away quickly in subsequent years. In contrast to outpatient demand, the number of inpatient visits and the number of days for which the inpatients were admitted at hospitals declined after the UC program was launched. In this paper, we offer our explanation of these phenomena, highlight problems associated with the UC program, and provide policy recommendations to improve the program.