Economics ETDs


Wenmei Guo

Publication Date



Smallholder famers in the developing countries, especially those who mainly depend on rain-fed agriculture, are vulnerable and sensitive to climate change because such agricultural cultivators largely depend on traditional farming techniques, and are less capable of coping with climate change (Krishnamurthy et al., 2013). Like many other developing countries, agricultural production in Nepal is largely dependent on rainfall, which causes high sensitivity to climate change for household food security. This dissertation, which is composed of three main studies, examines how serious climate change affects household food security, as well as the potential strategies households could adopt to cope with food insecurity and climate change. The first study investigates effects of temperature and rainfall trends since 1976 on individual caloric intake and household food diversity using cross-section data from Nepal Living Standard Survey 2010/2011. The analysis utilizes a Copula method to estimate the caloric intake and food diversity models simultaneously. Results show that the estimated correlation parameter between the two models is statistically significant from zero at the 1% level, confirming the validity of using the Copula method. We also find that the rainfall and temperature risk in rural Nepal negatively affects household food security (both caloric intake per capita and food diversity). Findings also highlight the importance of community social capital, coping strategies (i.e., remittance, access to credit, and government support), infrastructure, and agricultural income. The second study uses a Stochastic Frontier Production Model to examine the spatial effects of extreme climate events as well as the mean temperature and rainfall on rice production. We also analyze the factors affecting agricultural production efficiency using panel data from Nepal Living Standard Survey in 2003/2004 and 2010/2011. The results show that 1℃ increase in summer temperature causes a total loss of 4183 kg of rice in the sample. We also find that households located in the districts with more river and road systems are more efficient in rice production, and conclude that agricultural extension programs and education of the household head contribute to production efficiency. Driven by the findings, the following study investigates effects of farmers perception of climate change on their willingness to pay (WTP) for a weather index-based crop insurance. The study considers two crop insurance products: product A only insures rice and B insures both rice and livestock. We use the Biprobit method with contingent valuation data collected from a primary survey conducted in Bahunepati, Nepal. The results indicate that people who perceive the continuity of climate change or experience adverse effects of climate change are more willing to pay for the insurance products. In addition, we find that other existing mitigation strategies crowd out individuals' WTP. Finally, the annually median WTPs are 1.6% and 3% of household income for product A and B, respectively.

Degree Name


Level of Degree


Department Name

Department of Economics

First Committee Member (Chair)

Bohara, Alok

Second Committee Member

Jennifer, Thacher

Third Committee Member

McDermott, Shana

Fourth Committee Member

Bhattarai, Keshav




Food Security, Climate Change, Mitigation Strategies, Copula, Frontier Model

Document Type


Included in

Economics Commons