CHAPTER 5 (STATISTICAL MODELS)

As explained earlier in chapter 2 (section 2.1.7 & 2.3), statistical models can be used to estimate the impact of climate
change on rice productivity (tonnes/hectare). This chapter begins by detailed explanation about existing studies that apply
different statistical models. This chapter also describes theoretical background and analysis of data in obtaining the most
appropriate statistical model. At the end, a setting of parameters for the base case scenario is also described.
5.1 Some types of statistical models
There are two types of statistical models that have been widely used to estimate the impact of climate change on crop yield
(Lobell & Burke, 2010a). The first model is a linear-quadratic model and the second one is a log-linear model. Linearquadratic models usually combine linear and squared independent variables. A main idea of using squared variables is to
capture non-linear impacts of climate or technology on crop productivity (Lobell & Burke, 2010). Log-linear models are
usually used to estimate crop productivity if crop productivity follows a logarithmic pattern. The application of log-linear
models should be prioritised, in particular, if crop growth mimics a logarithmic pattern (Lobell et al., 2011) or to tackle
heteroscedasticity (Lobell & Burke 2010a).
5.1.1 Linear-quadratic models
In case of Indonesian rice, Falcon et al. (2004) and Naylor et al. (2009) apply linear-quadratic models in capturing the
impact of ENSO (El Nino Southern Oscillation) on Indonesian rice production. Those studies employ linear-quadratic
models embedding time variables and August SSTAs (Sea Surface Temperature Anomalies in August) in investigating the
negative impact of ENSO. Those studies point out that ENSO strongly affected Indonesian rice productivity.
Beyond Indonesian rice, some studies also have employed linear-quadratic models. Since climate models have different
rainfall projections, the future impact of rainfall on crops is relatively uncertain (Lobell & Burke, 2008). However, Lobell
and Burke (2008) suggest that the uncertain impact of rainfall on crops may be negated by a relatively small deviation of
rainfall projections. The latter means that as rainfall projections have a relatively small variance compared with observed
rainfall, the effect of future rainfall on crop production will have little impact. Furthermore, Lobell and Burke (2008) affirm
that the negative impact of temperature is more pronounced than the impact of rainfall on crops such as rice, maize and
sorghum.
In order to assess the impacts of different temperatures, Lobell, Bonfils and Duffy (2007) claim that employing minimum
and maximum temperature is better than that of average temperature. This finding is similar to another study conducted by
Lobell and Gourdji (2012). Those studies enhance the different responses of crop on maximum temperature and on
minimum temperature. Those studies (Lobell et al., 2007; Lobell & Gourdji, 2012) also claim that the role of temperature is
relatively important than that of precipitation. Likewise, those studies (Lobell et al., 2007; Lobell & Gourdji, 2012) explain

that maximum temperature may increase crop production as long as it is below its threshold, whereas minimum temperature
tends to increase respiration rate, causing a lower crop productivity.
Recently, there has been an increasing interest to combine production factors and climate to assess the impact of climate
change on crops. For instance, a study (Wang, Chang, Lu, Chang, & Tan, 2012) investigates the impact of climate change on
Taiwan rice and it reveals that a statistical model embedding climate and factor productions tends to have a higher
determination coefficient (R-squared of 49%) than a statistical model without climate (R-squared of 30%). This also means
that excluding climate on the production function tends to overestimate the effect of production factors on rice productivity
(Wang, et al., 2012).
Some outlined studies applying linear-quadratic models have some limitations. For instance, Lobell et al., (2007) tend to
overestimate the impact of climate change on crop as that study did not include production factors. Other studies (Lobell &
Burke, 2008; Wang, et al., 2012) fail to consider the different impacts of minimum and maximum temperature on crops.
Furthermore, Wang et al. (2012) may neglect spatial variability of climate and production factors among regions in Taiwan
as that study explores Taiwanese rice at a national scale, causing a lower determination coefficient.
5.1.2 Log-linear models
Gomez and Iglesias (2005) employ a log-linear model to estimate the impacts of climate variability on crops such as barley
and grape. That study claims that crop production is strongly affected by climate variability, namely, precipitation and
temperature. That study also explains that high temperature tends to increase crop production in wetland farming. While
high temperature tends to decrease crop production in dryland farming as high temperature tends to increase moisture stress
in dryland farming (Gomez & Iglesias, 2005). Another study (Lee, Nadolnyak & Hartarska, 2012) finds that climate can
negatively affect crop production in Asian countries. That study reveals that high temperature has a detrimental effect on
crop production, whereas rainfall can increase crop production (Lee et al., 2012).
Lobell, Schlenker, and Costa-Roberts (2011) point out that technological change has an important role in increasing crop
productivity. For this reason, embedding time variables might be needed to take account of the effect of technological
progress. After combining temperature, precipitation and time variables, Lobell et al. (2011) point out that negative impact
of climate may negate the positive impact of technology. In particular, the negative impact of temperature on crop
production is more predominant than that of precipitation (Lobell et al., 2011).
Three studies (Gomez & Iglesias, 2005; Lee et al., 2012; Lobell, Schlenker & Roberts, 2011) successfully indicate that
climate can negatively or positively impact crop production. Some studies (Gomez & Iglesias, 2005; Lee et al., 2012) also
satisfactorily combines production factors and climate in order to understand the impact of climate change on crops.
However, those existing studies have a main caveat. Some studies (Gomez & Iglesias, 2005; Lee et al., 2012) fail to
consider the different impacts of minimum and maximum temperature on crops.

This study is similar to other studies (Falcon et al., 2004; Naylor et al., 2009) in that it will assess the impact of climate
change on Indonesian rice yield but this study have new contributions. The first contribution is this study will explore the
impacts of minimum and maximum temperature on rice yield as minimum temperature and maximum temperature have the
different impacts on crops (Lobell et al., 2007). The second one is this study will apply a statistical model combining
production factors and climate to assess the impact of climate change on rice productivity.
NAME: BAHRI-HOMEWORK1