Crop Responses to Climate and Weather: Cross-Section and Panel Models

Abstract

Crop choices vary by climate, e.g., Florida specializes in citrus crops while Iowa specializes in corn and soybeans. The advantage of a cross-sectional analysis is that it incorporates how farmers adapt to existing difference in average climate conditions across space. A potential downfall is omitted variable bias. A panel analysis can overcome omitted variable bias by including fixed effects to capture all additive time-invariant influences, yet does not account for the same set of adaptation possibilities.