Incorporating climate effects into the measure of technical progress: an analysis for Brazilian agriculture.
Agricultural productivity; climate; technical progress; Brazilian agriculture; fixed effects panel.
The incorporation of climate effects on productivity measures is a recent topic in the field of applied studies of agricultural economics. Although it is trivial to understand that the climate affects, in several ways, agricultural activity, the analytical implementation of these effects on the sector's productivity measure is not. Thus, the main objective of the thesis work is to incorporate the effects of climate, given by temperature and precipitation variables, on the measure of agricultural productivity, but specifically on the measure of technical progress of Brazilian agriculture. To achieve this objective, we initially sought to adjust a production function for Brazilian agriculture based on the last three agricultural censuses (1995/96, 2006 and 2017) in order to obtain a measure of technical progress compatible with the existing measures in the literature. Discussing the results of this calibration is the main objective of this qualification document. In addition, the document also presents a review of the economic literature on the theme of climate versus agriculture, as well as the theoretical and empirical framework that guides the thesis work. A structural analysis of Brazilian agriculture showing the main evolutionary characteristics of the sector over the last decades is also presented. Regarding climate data, preliminary variables were prepared based on temperature and precipitation data, whose descriptive statistics are analyzed at the end of the document. The production function was adjusted at the geographic microregion level considering a translogtype functional form that was empirically estimated using a three-year fixed effects panel. The results reported an annual average of technical progress in Brazilian agriculture equal to 1,39%, with elasticities of production factors consistent with the growth trajectory of Brazilian agriculture.