The Value of Climate Amenities: Evidence from US Migration Decisions
AbstractWe value climate amenities by estimating a discrete location choice model for households that changed metropolitan statistical areas (MSAs) between 1995 and 2000. The utility of each MSA depends on location-specific amenities, earnings opportunities, housing costs, and the cost of moving to the MSA from the household’s 1995 location. We use the estimated trade-off between wages and climate amenities to value changes in mean winter and summer temperatures. At median temperatures for 1970 to 2000, a 1°F increase in winter temperature is worth less than a 1° decrease in summer temperature; however, the reverse is true at winter temperatures below 25°F. These results imply an average welfare loss of 2.7 percent of household income in 2020 to 2050 under the B1 (climate-friendly) scenario from the special report on emissions scenarios (Intergovernmental Panel on Climate Change 2000), although some cities in the Northeast and Midwest benefit. Under the A2 (more extreme) scenario, households in 25 of 26 cities suffer an average welfare loss equal to 5 percent of income.
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Bibliographic InfoPaper provided by Resources For the Future in its series Discussion Papers with number dp-13-01.
Date of creation: 03 Jan 2013
Date of revision:
climate amenities; discrete choice models; migration; welfare impacts of temperature changes;
Other versions of this item:
- Paramita Sinha & Maureen L. Cropper, 2013. "The Value of Climate Amenities: Evidence from US Migration Decisions," NBER Working Papers 18756, National Bureau of Economic Research, Inc.
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-05-11 (Agricultural Economics)
- NEP-ALL-2013-05-11 (All new papers)
- NEP-DCM-2013-05-11 (Discrete Choice Models)
- NEP-ENV-2013-05-11 (Environmental Economics)
- NEP-MIG-2013-05-11 (Economics of Human Migration)
- NEP-RES-2013-05-11 (Resource Economics)
- NEP-TUR-2013-05-11 (Tourism Economics)
- NEP-URE-2013-05-11 (Urban & Real Estate Economics)
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- David Albouy & Walter F. Graf & Ryan Kellogg & Hendrik Wolff, 2013.
"Climate Amenities, Climate Change, and American Quality of Life,"
NBER Working Papers
18925, National Bureau of Economic Research, Inc.
- Albouy, David & Graf, Walter & Kellogg, Ryan & Wolff, Hendrik, 2013. "Climate Amenities, Climate Change, and American Quality of Life," IZA Discussion Papers 7339, Institute for the Study of Labor (IZA).
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