The present study shows the economic effects of climate alteration on grain (maize, wheat, and rice) production in Iran using a Ricardian method. The model was estimated using the longitudinal data on grain yields and climate variables from 1983-2014. The marginal effects of climate changes on productivity of crops were estimated by applying Panel Corrected Standard Error (PCSE) models. Empirical results showed a considerable hill-shaped correlation between wheat yield and spring and fall rainfalls and temperatures. The joint effect of the spring and fall rainfall and temperature for wheat was significantly negative. For maize, the outcomes showed a considerable hill-shaped correlation between crop productivity and spring precipitation. Moreover, there was a meaningful interaction term between winter rainfall and temperature at 1%. Our results for maize yield were not as robust as those for wheat. For rice, winter temperature had a considerable U-shaped relationship with rice yield, while summer precipitation and temperature had a considerable hill-shaped relationship with yield. The annual marginal impacts of rainfall and temperature for all the crops were positive. The outcomes showed that in Iran, the sensitivity of cereal production to enhance in precipitation levels would be less compared to the increase in temperature.

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