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Temperature and Income: Reconciling New Cross-Sectional and Panel Estimates

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Author Info
Melissa Dell
Benjamin F. Jones
Benjamin A. Olken
Abstract

This paper presents novel evidence and analysis of the relationship between temperature and income. First, using sub-national data from 12 countries in the Americas, we provide new evidence that the negative cross-country relationship between temperature and income also exists within countries and even within states. Second, we provide a theoretical framework for reconciling the substantial, negative association between temperature and income in the cross-section with the even stronger short-run effects of temperature estimated by panel models. The theoretical framework suggests that half of the negative short-term effects of temperature may be offset in the long run through adaptation.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14680.

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Date of creation: Jan 2009
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Handle: RePEc:nbr:nberwo:14680

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Find related papers by JEL classification:
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September. [Downloadable!] (restricted)
  2. Matthew J Higgins & Daniel Levy & Andrew T Young, 2006. "Growth and Convergence across the United States: Evidence from County-Level Data," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 671-681, 09. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Füssel, Hans-Martin, 2009. "New results on the influence of climate on the distribution of population and economic activity," MPRA Paper 13788, University Library of Munich, Germany. [Downloadable!]
  2. Bluedorn, John C. & Valentinyi, Akos & Vlassopoulos, Michael, 2009. "The Long-Lived Effects of Historic Climate on the Wealth of Nations
    [The Long-Lived Effects of Historic Climate on the Wealth of Nations]    ," MPRA Paper 18701, University Library of Munich, Germany. [Downloadable!]
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This page was last updated on 2009-12-11.

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