Adapting to climate change with (in)complete land property rights: Evidence from the Hellenic cadastral reform in Greece

Overview & Synopsis

This paper questions the role of land property rights in coping with heat damage in agriculture.Taking advantage of a staggered cadastral reform that occurred in Greece between 2011 and 2019, we show that farmers having received the reform virtually offset all of the detrimental effects of abnormal heat exposure on crop yields. This pattern is consistent with our results indicating that farmers receiving better land property rights switch from land-extensification (i.e., adjustment of farmland area) to land-intensification strategies (i.e., adjustment of other inputs), ultimately reducing heat damage on crop yields. Our preferred estimates indicate that farmers receiving better land property rights reduce crop area expansion by at least seventy percent in face of abnormal heat exposure (compared to a no-reform situation). At the same time, they increase their utilization of machinery by point one percent respectively -while they reduce it by one percent when they do not receive the reform. These results underline the detrimental role of institutions in encouraging our societies to adapt to climate change.