Cookies?
Library Header Image
LSE Research Online LSE Library Services

Temperature variability and long-run economic development

Linsenmeier, Manuel (2023) Temperature variability and long-run economic development. Journal of Environmental Economics and Management, 121. ISSN 0095-0696

[img] Text (Temperature variability and long-run economic development) - Published Version
Available under License Creative Commons Attribution.

Download (2MB)

Identification Number: 10.1016/j.jeem.2023.102840

Abstract

This study examines the effects of temperature variability on long-run economic development. To identify causal effects, a novel econometric strategy is employed, based on spatial first-differences. Economic activity is proxied by satellite data on nightlights. Drawing on climate science, the study distinguishes between temperature variability on three time scales: day-to-day, seasonal, and interannual variability. The results indicate that day-to-day temperature variability has a statistically significant, negative effect on economic activity, while seasonal variability has a smaller but also negative effect. The effect of interannual variability is positive at low temperatures, but negative at high temperatures. Furthermore, the results suggest that daily temperature levels have a non-linear effect on economic activity with an optimal temperature around 15 degrees Celsius. However, most of the estimated effects of variability cannot be explained with this non-linearity and instead seem to be due to larger uncertainty about future temperature realisations. The empirical effects can be found in both urban and rural areas, and they cannot be explained by the distribution of agriculture. The results indicate that projected changes of temperature variability might add to the costs of anthropogenic climate change especially in relatively warm and currently relatively poor regions.

Item Type: Article
Additional Information: © 2023 The Author(s)
Divisions: Geography & Environment
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences
G Geography. Anthropology. Recreation > G Geography (General)
H Social Sciences > HB Economic Theory
JEL classification: Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate; Natural Disasters
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development; Environment and Trade; Sustainability; Environmental Accounting; Environmental Equity
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R14 - Land Use Patterns
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Date Deposited: 26 Jun 2023 09:24
Last Modified: 26 Nov 2023 00:57
URI: http://eprints.lse.ac.uk/id/eprint/119485

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year

View more statistics