Agricultural productivity and local economic resilience to heat stress: Evidence from rural India

Abstract

Rising temperatures pose significant risks to rural livelihoods in India, yet limited empirical evidence explains how local economies sustain consumption during extreme-temperature events. This study examines whether agricultural productivity, measured through district-level rice yields, functions as a locally embedded resilience mechanism that moderates the welfare effects of extreme-temperature exposure. Using nationally representative household survey data aggregated into a district-level panel, the study applies fixed-effects, gender-disaggregated, and quantile regression approaches. The analysis shows that higher rice productivity is positively associated with rural consumption under both normal and extreme-temperature conditions, with comparatively larger coefficients during periods of heat stress. This relationship remains robust across alternative heat measures, model specifications, and time periods. Gender-disaggregated estimates indicate distinct consumption-buffering patterns, consistent with income-stabilization mechanisms among male-headed households and food-security-based mechanisms among female-headed households. Quantile estimates further show that the positive association extends across the consumption distribution, although its magnitude varies. By situating agricultural productivity within local economic systems, the study highlights its contribution to place-based resilience. The evidence supports investments in irrigation, heat-tolerant crop varieties, accessible extension services, and stronger local agricultural markets, alongside targeted support for vulnerable households, to promote rural development.