This paper investigates the impact of heat waves on the productivity of the Italian food industry. Using daily weather and firm-level data for the 2004-2019 period, we show that a heat wave causes, on average, a reduction in Total Factor Productivity (TFP) of about 3.2%. Smaller firms are more severely affected, with a reduction of approximately 7%, revealing unequal impacts within the same country and sector. The reduction in TFP can be partially attributed to lower workers' productivity, with labour input increased in order to compensate for productivity loss. The estimated effect is heterogeneous across subsectors, with some well-known Italian products (e.g., wine production) more severely affected by heat waves. These findings have significant policy implications due to the expected increase in the frequency of heat waves caused by climate change, and are particularly important in the case of the Italian food industry, which is mainly composed of small firms. The paper highlights the need to investigate further the impacts of heat stress on the entire food system, as most of the literature has predominantly focused on the agricultural sector.

The impact of heat waves on food industry productivity: Firm‐level evidence from Italy / P. Nota, D. Curzi, O.K. Haase, A. Olper. - In: JOURNAL OF AGRICULTURAL ECONOMICS. - ISSN 0021-857X. - 75:3(2024), pp. 914-930. [10.1111/1477-9552.12608]

The impact of heat waves on food industry productivity: Firm‐level evidence from Italy

P. Nota
Primo
;
D. Curzi
Secondo
;
O.K. Haase
Penultimo
;
A. Olper
Ultimo
2024

Abstract

This paper investigates the impact of heat waves on the productivity of the Italian food industry. Using daily weather and firm-level data for the 2004-2019 period, we show that a heat wave causes, on average, a reduction in Total Factor Productivity (TFP) of about 3.2%. Smaller firms are more severely affected, with a reduction of approximately 7%, revealing unequal impacts within the same country and sector. The reduction in TFP can be partially attributed to lower workers' productivity, with labour input increased in order to compensate for productivity loss. The estimated effect is heterogeneous across subsectors, with some well-known Italian products (e.g., wine production) more severely affected by heat waves. These findings have significant policy implications due to the expected increase in the frequency of heat waves caused by climate change, and are particularly important in the case of the Italian food industry, which is mainly composed of small firms. The paper highlights the need to investigate further the impacts of heat stress on the entire food system, as most of the literature has predominantly focused on the agricultural sector.
firm-level TFP; food industry; heat waves; productivity; temperature
Settore AGRI-01/A - Economia agraria, alimentare ed estimo rurale
Settore ECON-01/A - Economia politica
2024
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2434/1098368
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