The impact of weather shocks on crop yields: Evidence from India

Given that nearly half of the Indian labor force is employed in agriculture, extreme weather events may harm most of the country's population. By exploiting annual variation within Indian districts, I test whether greater temperature fluctuations significantly decrease the output value of 13 major crops. I find that a 1 degrees C deviation above the annual mean temperature leads to a 21.3 percentage point decline in output value for a given year, indicating substantial losses from large fluctuations in temperature. I also find evidence that proportion of crop area irrigated and fertilizer usage mitigates the negative impacts of temperature shocks.