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Temperature variability and long-run economic development

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  • Linsenmeier, Manuel
Abstract
This study estimates causal effects of temperature variability on long-run economic development, which are not accounted for in most estimates of the costs of future climate change. For identification I use a novel research design based on spatial first-differences. Economic activity is proxied by nightlights. Informed by the underlying physical mechanisms, I distinguish between day-to-day, seasonal, and interannual variability. The results suggest an economically large and statistically significant negative effect of day-to-day variability on economic activity. Regarding seasonal variability, I find a smaller but also negative effect. The estimated effect of interannual variability is positive at low and negative at high temperatures. These effects are robust, they can be identified in urban and rural areas, and they cannot be explained with the spatial distribution of agriculture. The results suggest that temperature variability will add to the costs of anthropogenic climate change, especially in relatively warm and currently relatively poor regions.

Suggested Citation

  • Linsenmeier, Manuel, 2021. "Temperature variability and long-run economic development," SocArXiv xvucn, Center for Open Science.
    • Handle: RePEc:osf:socarx:xvucn
    DOI: 10.31219/osf.io/xvucn
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    Cited by:

    1. Piergiorgio Alessandri & Haroon Mumtaz, 2021. "The Macroeconomic Cost of Climate Volatility," Working Papers 928, Queen Mary University of London, School of Economics and Finance.

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    More about this item

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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