The El Niño impact on maize yields is amplified in lower income teleconnected countries

Abstract

We use a multiple-regime panel smooth transition regression to examine the economic and climatic sources of the nonuniform relationship between El Niño Southern Oscillation (ENSO) and maize yields around the globe. While the yield effect is predominantly observed in strongly teleconnected countries, it is amplified in lower income countries, which we attribute to possible lack of resilience to ENSO - induced weather shocks. Both El Niño-like and La Niña-like conditions result in maize yield reduction, but it is during El Niño events when maize yields drop by up to 20% in most affected countries. Because in many of these countries maize is an important agricultural crop, the presented results are of interest to researchers and policy makers in the areas of world nutrition and international aid. Moreover, because larger share of maize is produced by high income weakly teleconnected countries, the observed geographic heterogeneity of the El Niño impact offers possible benefits from global risk sharing. These findings also offer insights to climate change economics, as possible increased frequency of the ENSO cycle may negatively impact maize production in strongly teleconnected low income countries.