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(Eqs. 3.1 and 4.1).
| Panel A: First Stage, Eq. 3.1 | Onions | Melons |
|---|---|---|
| Variable | Coefficient | Coefficient |
| Cost | 0.9 (0.027) | 0.86 (0.043) |
| Acreage | 0.03 (0.022) | 0.12 (0.041) |
| Number of Days D1, (95oF–100oF) | 0.015 (0.014) | 0.03 (0.001) |
| Number of days D2 (>100oF) | 0.02 (0.001) | 0.005 (0.002) |
| Constant | −1.21 | −1.16 |
| Panel B: Second Stage, Eq. 4.1 | Onions | Melons |
| Variable | Coefficient | Coefficient |
| Labor | −0.05 (2.064) | 0.037 (1.89) |
| Cost | 0.05 (1.965) | −0.04 (1.64) |
| Acres | 1.03 0.123) | 0.015 (0.371) |
| Constant | −6.53 (3.437) | 15.37 (2.95) |
| Within R2 | 0.9 | 0.9 |
Panel A shows that for melons, as the number of days above the heat index increases the crop labor requirement also increases; this is true for both heat index buckets. That is, as the heat index increases, the total labor required to harvest melons also increases. The sign is positive for cost and acreage harvested, as expected. The results for melons in Panel A are all significant. Panel B shows that as the labor requirement for melons increases total output also increases: a 1% increase in the crop labor requirement (i.e., labor employed) results in an increase in output of 3%. This result is deceiving: the reason that the crop labor requirement is increasing is due to a higher heat index. That is, in order to achieve higher output producers must “overcompensate” for the negative impact of heat on labor. This would obviously entail a cost to the farmer and potentially lower financial margins.
The results for onions are somewhat different. Panel A shows that as the number of days in each of the heat index buckets increases the crop labor requirements also increase. For example, a 1% increase in the number of days in the 95oF–100oF bucket increases the crop labor requirement by 0.15%. The impact of an increase in the number of days in the highest heat index bucket is even higher: a 1% increase in the number of days above 100oF results in a 2% increase in the crop labor requirement for onions. The signs for cost and acreage are also positive and as expected: as acreage harvested increase, labor costs also increase, and the same is true for capital costs. Panel B shows the result of estimation of Eq. (4.1) for onions. Results show that increases in the crop labor requirement results in a negative impact on production. That is, as more labor is employed, the impact of heat on production has reached a value such that no matter how much labor you employ to compensate for the increases in heat, its impact on productivity is negative for all ranges of the heat index values considered in the analysis. Results in Panel B for onions are all statistically significant. This result is consistent with other results that have used linear models to estimate the impact of heat on rice workers in India (Sahu et al., 2013) and productivity of workers in industrial (indoor) settings in the absence of air conditioning (Somanathan et al., 2018). Our method improves on those other studies in that, at least relative to work on rice workers in India, we use an economic model to estimate the impact of heat on labor productivity within an economic production framework and not just an ad hoc relationship between harvest rates and heat.
The results reported here also add a policy dimension that transcends the health impact of heat on workers and agricultural production. For example, our estimation procedures show that the impact of heat is crop specific. In fact, for onions we have seen that despite the impact of heat in the counties under analysis, onion production has not diminished. One likely reason for this is that onions are a crop that has been gradually becoming more mechanized over time, enabling farmers to overcome the negative impact of heat. That is not the case for melons, for which harvesting is still done by hand.
2.7. CONCLUSIONS
The primary goal of the analysis presented in this chapter is to propose a new methodology to estimate the impact of heat waves on agricultural labor productivity and, hence, on the overall performance of the agricultural sector. Unlike previous studies, our approach uses an economic production framework to estimate the impact of heat on production. In addition, previous studies using an economic framework have analyzed the impact of heat on indoor labor, not outdoor labor as in this study. We also diverge from previous studies in that we incorporate the seasonality component of harvesting activities in the agricultural sector. Using this expanded methodological framework, we were able to estimate the impact of extreme heat levels on harvesting productivity on two labor‐intensive crops.
Our results show that heat has a negative impact on labor productivity with significant final impacts on agricultural output. Reduction in labor productivity shows via increases in specific crop labor requirements. The consequences of the increase in crop labor requirements are twofold. On the health front, if the increase in crop labor requirements means workers stay in the fields for longer periods, then they are exposed to heat conditions longer. Second, if farmers are required to hire more workers, then this means that a larger number of workers are exposed to adverse conditions. In either case, workers suffer negative health consequences due to heat. The second aspect of the impact of heat is more obvious: increases in crop labor requirements result in higher production costs, which could translate into higher food prices, reduced margins, or both. We note that the agricultural labor force is made up of mostly Mexican and Central American workers, often at a disadvantage in terms of legal status and subject to abuse and neglect in terms of complying with regulations that mitigate heat impacts on worker’s health. Medical research has taken important steps in documenting health impacts of heat occurrence. Our chapter makes important contributions to the analysis of the economic impact of heat on agricultural labor. That said, more research is need on this field.
An important caveat of the modeling approach used in the analysis is that the results are highly aggregated at the regional (county) level out of necessity, because the data did not support a crop‐by‐county approach. On a more positive note, the results enable analyzing the impact of heat on each crop and, thus, enables planners and others to look at specific market conditions for particular segments of the agricultural sector. In addition, because the results are crop specific and incorporating mitigating measures to reduce