Effect of Temperature and Rainfall Variation on Land Value: Evidence from Bangladesh

Abstract: Land is a central component of rural wealth in low-income countries, and its value reflects expected future returns. This paper examines how temperature and rainfall variation affect farmland and non-farmland values in rural Bangladesh. Using nationally representative household panel data (2011-2018) and daily weather records, I find that extreme heat reduces farmland values, while unusual minimum temperatures and rainfall lower non-farmland values. These effects vary across households: poorer households are more exposed to losses in farmland value, whereas wealthier households experience larger declines in non-farmland values from weather anomalies. The findings show that weather variation affects rural land values through both agricultural and non-agricultural channels.