Climate Change Beliefs and Perceptions of Agricultural Risks: An Application of the Exchangeability Method

Using the exchangeability method, we elicit Italian farmers’ short- and long-run perceptions of agricultural risks related to climate change. We consider four sources of crop loss risk: powdery mildew and hail for grape growers and apple dieback and hail for apple farmers. We find that perceived crop loss risks tend to be greater in the long run than in the short run. Controlling for a variety of factors (past experiences with crop losses, farming experience, numeracy, interactions with other producers, and farm characteristics), we identify climate change beliefs as a critical factor explaining the short- vs. long-run difference in risk perceptions: those who believe in climate change project larger future crop losses. Additionally, prior direct experience with crop losses helps explain why certain farmers perceive greater risk. Our results suggest that outreach services should offer field days providing first-hand exposure to crop losses and adopt a segmented approach that considers farmers’ climate change beliefs.