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The amenity value of climate to households in Germany

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  • Katrin Rehdanz
  • David Maddison

Abstract

Despite the importance of as comprehensive as possible damage cost estimates to cost benefit analyses of global attempts to reduce greenhouse gas emissions, few researchers have attempted to monetize the direct impact of climate change on households. This study uses the hedonic technique to measure the amenity value of the climate to German households. Evidence suggests that the amenity value of climate variables is capitalized mainly into hedonic house price differentials. Overall, German households appear to prefer warmer winters with less rainfall. Combining estimates of amenity values with the predicted changes in climate associated with the IPCC's A2 emissions scenario we find that the overall impact of climate change on German households, whilst negative, is typically not statistically different from zero. This occurs in part because the prediction is for warmer but wetter winters and also because the amenity value of some climate variables cannot be measured with sufficient precision. Copyright 2009 , Oxford University Press.

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  • Katrin Rehdanz & David Maddison, 2009. "The amenity value of climate to households in Germany," Oxford Economic Papers, Oxford University Press, vol. 61(1), pages 150-167, January.
    • Handle: RePEc:oup:oxecpp:v:61:y:2009:i:1:p:150-167
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    1. P. Michael Link & Richard S. J. Tol, 2004. "Possible economic impacts of a shutdown of the thermohaline circulation: an application of FUND," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 3(2), pages 99-114, September.
    2. Beatriz Gaitan S. & Richard S.J. Tol & I. Hakan Yetkiner, 2006. "The Hotelling’s Rule Revisited in a Dynamic General Equilibrium Model," Papers of the Annual IUE-SUNY Cortland Conference in Economics, in: Oguz Esen & Ayla Ogus (ed.), Proceedings of the Conference on Human and Economic Resources, pages 213-238, Izmir University of Economics.
    3. Andrea Bigano & Jacqueline M. Hamilton & Maren A. Lau & Richard S.J. Tol & Zhou Yuan, 2004. "A Global Database Of Domestic And International Tourist Numbers At National And Subnational Level," Working Papers FNU-54, Research unit Sustainability and Global Change, Hamburg University, revised Nov 2004.
    4. Jacqueline M. Hamilton & Richard S.J. Tol, 2004. "The Impact Of Climate Change On Tourism And Recreation," Working Papers FNU-52, Research unit Sustainability and Global Change, Hamburg University, revised Nov 2004.
    5. Armi Susandi & Richard S.J. Tol, 2004. "Impact of international emission reduction on energy and forestry sector of Indonesia," Working Papers FNU-53, Research unit Sustainability and Global Change, Hamburg University, revised Nov 2004.
    6. Katrin Rehdanz & David Maddison, 2004. "The Amenity Value of Climate to German Households," Working Papers 2004.57, Fondazione Eni Enrico Mattei.
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    Cited by:

    1. Maddison, David & Rehdanz, Katrin, 2011. "The impact of climate on life satisfaction," Ecological Economics, Elsevier, vol. 70(12), pages 2437-2445.
    2. Eda Ustaoglu & Chris Jacobs-Crisioni, 2022. "What Drives Residential Land Expansion and Densification? An Analysis of Growing and Shrinking Regions," Land, MDPI, vol. 11(10), pages 1-27, September.
    3. Chauvin, Juan Pablo & Glaeser, Edward & Ma, Yueran & Tobio, Kristina, 2017. "What is different about urbanization in rich and poor countries? Cities in Brazil, China, India and the United States," Journal of Urban Economics, Elsevier, vol. 98(C), pages 17-49.
    4. Kopmann, Angela & Rehdanz, Katrin, 2013. "A human well-being approach for assessing the value of natural land areas," Ecological Economics, Elsevier, vol. 93(C), pages 20-33.
    5. Ahmadiani, Mona & Ferreira, Susana, 2019. "Environmental amenities and quality of life across the United States," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    6. H. Allen Klaiber & Joshua K. Abbott & V. Kerry Smith, 2017. "Some Like It (Less) Hot: Extracting Trade-Off Measures for Physically Coupled Amenities," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(4), pages 1053-1079.
    7. Leonardo Becchetti, 2010. "The Money–Happiness Relationship in Transition Countries: Evidence from Albania," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 17(1), pages 39-62, May.
    8. Thomas Murray & David Maddison & Katrin Rehdanz, 2013. "Do Geographical Variations In Climate Influence Life-Satisfaction?," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 4(01), pages 1-21.
    9. Helena Meier & Katrin Rehdanz, 2017. "The amenity value of the British climate," Urban Studies, Urban Studies Journal Limited, vol. 54(5), pages 1235-1262, April.
    10. Howard, Peter H., 2012. "Climate Change, Vegetation, and Welfare: Estimating the Welfare Loss to Landowners of Marginal Shifts in Blue Oak Habitat," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124744, Agricultural and Applied Economics Association.
    11. Dan S. Rickman, 2014. "Assessing Regional Quality of Life: A Call for Action in Regional Science," The Review of Regional Studies, Southern Regional Science Association, vol. 44(1), pages 1-12, Spring.
    12. Zhou Yuan & Richard S.J. Tol, 2005. "Water Use in China’s Domestic, Industrial and Agricultural Sectors: An Empirical Analysis," Working Papers FNU-67, Research unit Sustainability and Global Change, Hamburg University, revised Jun 2005.
    13. David Maddison & Katrin Rehdanz & Daiju Narita, 2013. "The household production function approach to valuing climate: the case of Japan," Climatic Change, Springer, vol. 116(2), pages 207-229, January.
    14. Zanni, Alberto M. & Ryley, Tim J., 2015. "The impact of extreme weather conditions on long distance travel behaviour," Transportation Research Part A: Policy and Practice, Elsevier, vol. 77(C), pages 305-319.
    15. Frances Sussman & Bansari Saha & Britta G. Bierwagen & Christopher P. Weaver & Will Cooper & Philip E. Morefield & John V. Thomas, 2014. "Estimates Of Changes In County-Level Housing Prices In The United States Under Scenarios Of Future Climate Change," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 1-23.
    16. Oliveira, Jaqueline & Pereda, Paula, 2020. "The impact of climate change on internal migration in Brazil," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).

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    More about this item

    JEL classification:

    • R29 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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