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Adaptation of Agricultural Production to Climate Change in Northeast China:A Behavioral Economics Interpretation

YUN Yaru, FANG Xiuqi, TIAN Qing (School of Environment, Beijing Normal University, Beijing 100875, China)  
Climate change is playing an increasingly important role in the decision making of agricultural production. This paper attempts to bring some insights from behavioral economics into the adaptation of agricultural production to climate change. In this study, crop planting is taken as an individual or domestic economic behavior. We found that behavioral psychology methodology is more applicable for the analysis of the process of agricultural decision making than traditional economy. The research surveyed in this paper covered 554 farmers of 11 counties in Northeast China and the result shows that agricultural production behaviors are consistent with the theories of behavioral psychology in general. The decision making of agricultural production is affected by the cognition biases and modes of thinking. Under the state of uncertainty, agricultural judgment always shows systematic deviation from traditional economy theories, and all of these irrational behaviors cause the time-lag phenomenon between climate change and human adaptation. Two representative factors contribute to the deviation: 1) The farmers' agricultural production behaviors tend to be irrational because of the influence of heuristic bias including representativeness, availability and anchoring. Representativeness bias causes people to be insensitive to prior probability of outcome and sample size in choosing crops species, especially exaggerating the representativeness of small samples. In this case, farmers erroneously decide to plan some more lucrative crops with more thermal demands, even though it is not fit for the local weather condition. The result also shows that affected by availability bias, the local farmers are inclined to assume the weather condition of the coming year will be exactly the same as the current year or will follow the changing trend of recent several years in making the coming year agricultural plans. The plan based on the weather condition assumption is exactly suitable for the reference year while it is uncertain for the actual weather condition. The change of climate will be reflected in the agricultural decision making for the next year. For the agricultural income estimation, farmers are used to forecasting based on the history price, especially the price of the previous year. The selling price will be affected by the supply and demand balance and farmers need to do adjustment within a specific threshold correspondingly. Climate change has significant impacts on the agricultural output and the insufficient adjustment makes it hard for the farmers to sell their products at the peak of price. So the actual farmers' income will also be lower than expected due to the climate change. 2) Affected by the inherent characteristic of local agricultural production, farmers in Northeast China are used to taking conservative behavior in choosing crop strains based on the relatively low reference point.
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