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The Amenity Value Of Climate To Households In Germany

Author

Listed:
  • David J. Maddison
  • Katrin Rehdanz

    (Research unit Sustainability and Global Change, Hamburg)

Abstract

This study uses the hedonic approach to measure the amenity value of climate in Germany. Unlike in earlier research separate hedonic wage rate and house price regressions are estimated for relatively small geographic areas and formal tests undertaken to determine whether the coefficients describing the impact of climate variables are homogenous over these areas. The evidence suggests that households in Germany are compensated for climate amenities mainly through hedonic housing markets. Given that climate is largely unproductive to industry and few industries spend more on land than labor this is consistent with what theory would predict. Overall households regard higher January temperatures as an amenity but higher July temperatures as a disamenity.

Suggested Citation

  • David J. Maddison & Katrin Rehdanz, 2004. "The Amenity Value Of Climate To Households In Germany," Working Papers FNU-39, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2005.
    • Handle: RePEc:sgc:wpaper:39
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    References listed on IDEAS

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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. 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.
    3. Katrin Rehdanz & David Maddison, 2004. "The Amenity Value of Climate to German Households," Discussion Papers of DIW Berlin 414, DIW Berlin, German Institute for Economic Research.
    4. 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.
    5. 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.
    6. 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.
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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. 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.
    3. 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.
    4. 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.
    5. 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.
    6. 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.
    7. 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.
    8. 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.
    9. 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.
    10. 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.
    11. 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.
    12. 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.
    13. Ahmadiani, Mona & Ferreira, Susana, 2019. "Environmental amenities and quality of life across the United States," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    14. 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.
    15. 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).
    16. 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.

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    More about this item

    Keywords

    amenity value; Climate Change; Germany; Hedonic Pricing;
    All these keywords.

    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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