Weathering Climate Change: How Farmers Learn from Forecast Outcomes

Full citation:

Surendra, Vaishnavi , Shawn ColeTomoko Harigaya. 2025. “Weathering Climate Change: How Farmers Learn from Forecast Outcomes.” Working paper.  

Links:

https://www.vaishnavisurendra.com/pdf/Weather_CHS.pdf

Abstract:

Weather-induced risk reduces farmers’ incomes, and climate change is increasing such risk. One promising intervention to mitigate risk is high-quality, probabilistic, short-to-medium-range weather forecasts, which predict weather between zero and fifteen days ahead. For forecasts to be effective, however, farmers have to understand and act on them. This paper evaluates how farmers use probabilistic forecasts and form beliefs about their accuracy in a lab-in-the-field experiment. In scenarios that mimic real-world decision making, we find that farmers update their beliefs about the (in)accuracy of forecasts following false alarms, where forecasts erroneously predict events. Farmers who experience false alarms perform worse in subsequent rounds of incentivized experimental games, and report a lower willingness-to-pay for a real-world weather forecast service in an incentive-compatible Becker-DeGroot-Marschak elicitation. Light-touch interventions to improve probability comprehension and make climate change salient have limited impact on farmer decision-making, with positive effects that are mitigated by the incidence of false alarms.