César Antonio Salazar Espinoza

Ph.d.-forsvar: César Antonio Salazar Espinoza: "Essays on risk management of natural resources in developing countries"

This thesis consists of 4 self-contained chapters, all examining how production risk from natural shocks affects decisions regarding the management of natural resources and agriculture in a developing country context. Three of the chapters investigate households’ risk-management strategies in resource-based activities, while a fourth chapter focuses on market functioning at the face of climate shocks.

The first chapter uses a unique census data from artisanal fisheries in Chile to examine the mechanisms by which revenues are distributed to labor and capital, and how these distributions affect fishing returns. The results support mechanisms associated with bargaining power, monitoring costs and outside options, and also reveal higher fishing returns with larger crew profit shares. Effects seem to differ across fisheries. The second chapter uses a balanced panel of rural households from Mozambique to provide an empirical examination of the impact of weather shocks on crop portfolio choices as well as on the persistency of these changes. Results indicate that crop choice is sensitive to past weather shocks, and reallocation seems temporary. This is consistent with a self-insurance approach and buffer stock arguments. The third chapter employs rural household data of rice producers from Vietnam to examine the risk effect of pesticide use and the source of this risk. Results reveal that higher uncertainty regarding rainfall relative to pest may cause pesticide use to exhibit risk-increasing characteristics. This finding is consistent across a lottery and a production function approach. The fourth chapter studies the link between spatial market efficiency and weather shocks using market price and transport cost data from Mozambique. Results indicate that price dispersion is lower during drought periods and higher after a flood shock. This finding is consistent with a supply shock after a drought and a food transport shock emerging after a flood. Moreover, flood effects are larger among closer markets and connected with poorer infrastructure.