May

21

 While the skeptical environmentalist Dr. Lomborg may contest trends in global warming and the increased frequency of natural disasters, I focussed on severe weather conditions in the US between 1955 and 2005. More specifically, having analyzed the annual frequency of hails and tornadoes in both Midwestern states and the whole US, I have come to the following conclusions:

(1) Both hail and tornado observations (not accounting for the severity or resulting economic costs) have risen since 1955. While the tornado frequency increased in linear fashion, hail observations however have grown exponentially over the same sample period.

(2) As one would expect, hail and tornado frequencies are co-integrated, whereby the latter are Granger-caused by the former.

(3) Rates of annual increases of both time series observations are slightly lower for the Midwest than the US on average.

However, my hypothesis that increasing numbers of hail and/or tornado observations might impact US grain markets was not confirmed. Having calculated annual volatilities (on a calendar rather than production year basis) for hard red spring and winter wheat varieties for Midwestern states of production, wheat volatilities were not correlated with either hail or tornadoes observations and consequently no regression yielded any significance.


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