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Non-linear Impacts of Climate Change on Income and Inequality in Vietnam

Author

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  • Etienne ESPAGNE
  • Nicolas DE LAUBIER-LONGUET MARX
  • Thanh NGO-DUC

Abstract

This paper measures the marginal impact of climate variability on Vietnamese households’ income. We combine survey data from the Viet Nam Household Living Standard Survey (VHLSS) database with daily climate data from the Climate Prediction Center to estimate the response function of Vietnamese households’ revenues to past climate variability. We focus on the non-linearity of the response and notably on the impacts of extremely warm days. We find that on average an additional day above 33°C is associated with a decrease of the yearly income by 1.3%. This strong effect is not specific to the agricultural sector. It is highest for the lowest deciles of the revenue distribution. Using projection scenarios under the Representation Concentration Pathways (RCP) 8.5 and 4.5, we find an estimated impact of global warming of up to 100% of households’ revenues in 2090s in some regions (Northern region and the Red River Delta area) under RCP8.5. These strong negative impacts are also likely to be specifically concentrated on poor households and to increase revenue inequalities.

Suggested Citation

  • Etienne ESPAGNE & Nicolas DE LAUBIER-LONGUET MARX & Thanh NGO-DUC, 2019. "Non-linear Impacts of Climate Change on Income and Inequality in Vietnam," Working Paper e47825f2-0059-4010-8291-1, Agence française de développement.
    • Handle: RePEc:avg:wpaper:en9477
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    References listed on IDEAS

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    Cited by:

    1. Malevolti, Giulia, 2022. "Can weather shocks give rise to a poverty trap? Evidence from Nigeria," 96th Annual Conference, April 4-6, 2022, K U Leuven, Belgium 321172, Agricultural Economics Society - AES.
    2. Paglialunga, Elena & Coveri, Andrea & Zanfei, Antonello, 2022. "Climate change and within-country inequality: New evidence from a global perspective," World Development, Elsevier, vol. 159(C).
    3. Elena Paglialunga & Andrea Coveri & Antonello Zanfei, 2020. "Climate change and inequality in a global context. Exploring climate induced disparities and the reaction of economic systems," Working Papers 2003, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2020.
    4. Giulia Malevolti, 2022. "Can weather shocks give rise to a poverty trap? Evidence from Nigeria," Working Papers - Economics wp2022_10.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    5. Zanhouo, Abdoul Karim & Acma, Bulent, 2021. "Impact of climate change on households welfare in Burkina Faso. Welfare decomposition analysis," Conference papers 333260, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Signe Krogstrup & William Oman, 2019. "Macroeconomic and Financial Policies for Climate Change Mitigation: A Review of the Literature," IMF Working Papers 2019/185, International Monetary Fund.
    7. Phon Sophat & Bun Phany, 2022. "The Effects of Microcredit on Households Economy in Cambodia," Working Papers hal-03538199, HAL.

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    Keywords

    Vietnam;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics

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