TEMPERATURE SHOCKS AND AGRICULTURAL OUTPUT IN NIGERIA: A DYNAMIC COMPUTABLE GENERAL EQUILIBRIUM APPROACH

Abstract

This study investigated the effect of temperature shocks on agricultural output in Nigeria using the Dynamic Computable General Equilibrium (DCGE) model. By examining the effects of temperature rise, the study provided valuable insights into the influence of extreme weather conditions on agricultural output in Nigeria. Data was obtained from the 2019 social accounting matrix (SAM). The estimation involved a simulation, which was conducted to determine both the short term and long-term effects of temperature shocks. The findings of the study showed that higher temperatures would result in a decrease in agricultural output in both the short and long term. The study therefore emphasized the need for proactive policies towards countering the negative effect of high temperature in the agricultural sector. Policies should also seek to influence the behavior of economic agents such that their economic activities do not contribute to higher temperature and heat levels.