Econometric Analysis of Climate Change Impacts on Agricultural Output in the MENA Region

Abstract

The applied literature on the MENA region remains fragmented between studies focused on the economic determinants of agricultural value added and climate and agriculture analyses via food security, without jointly assessing productive and climatic factors. This article fills that gap by measuring the combined effects of temperature, precipitation, capital, labor, and arable land on agricultural value added (VAAG) across 21 MENA countries over 1990–2024. We estimate a fixed effects model with cluster-robust standard errors and verify robustness using System GMM. The results indicate that rising temperatures are associated with a significant decline in VAAG, whereas moderate and regular rainfall, as well as endowments of capital, labor, and arable land, exert positive effects. Theoretically, the study highlights, over a long horizon and a reasonably homogeneous regional scope, the differentiated roles of thermal constraints and water availability, with inference strengthened by System GMM as a robustness check. Operationally, the findings support policies for efficient irrigation, decentralized storage, and managed aquifer recharge, alongside financial incentives and training to accelerate the adoption of resilient techniques, while safeguarding arable land. Together, these measures provide concrete levers to strengthen agricultural resilience in the MENA region.