Precipitation, Profits, and Pile-Ups
AbstractIn considering the economic impacts of climatic changes, economists frequently use annual national income as a proxy for social welfare. I show that such studies suffer from a significant bias, arising from the fact that such models typically ignore changes in mortality rates. Using panel data from Australia, I show that rainfall lowers traffic deaths, suggesting that the standard approach may underestimate the true economic cost of droughts.
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Bibliographic InfoPaper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 629.
Date of creation: Dec 2009
Date of revision:
national income; social welfare; rainfall; traffic fatalities;
Find related papers by JEL classification:
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
- J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
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