How are farmers adapting to climate change in Vietnam? Endogeneity and sample selection in a rice yield model
Vietnam is likely to be among the countries hardest hit by climate change, threatening its legacy as a champion in leveraging agriculture for development. This discussion paper examines how a changing climate may affect rice production and how Vietnamese farmers could to adapt to various climatic conditions using an innovative yield function approach. The model addresses common methodological problems in the yield function estimation, including sample selection, endogeneity and heterogeneity. The results suggest that although climate change can potentially reduce rice production, farmers will respond mainly by adjusting the production portfolio and levels of input use. However, investments in rural infrastructure and human capital will have to support farmers in the adaptation process, if production levels and farm incomes are to be sustained in the future. The paper concludes with major findings and policy implications.