PNNL

Abstract

Demand for agricultural products is an important problem in climate change economics. Food consumption will shape and shaped by climate change and emissions mitigation policies through interactions with bioenergy and afforestation, two critical issues in meeting international climate goals such as two-degrees. We develop a model of food demand for staple and nonstaple commodities that evolves with changing incomes and prices. The model addresses a long-standing issue in estimating food demands, the evolution of demand relationships across large changes in income and prices. We discuss the model, some of its properties and limitations. We estimate parameter values using pooled cross-sectional-time-series observations and the Metropolis Monte Carlo method and cross-validate the model by estimating parameters using a subset of the observations and test its ability to project into the unused observations. Finally, we apply bias correction techniques borrowed from the climate-modeling community and report results.