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The impact of climate on Indian households' living costs

Author

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  • Qu, Yuhang
  • Maddison, David J.
  • Elliott, Robert J.R.
  • Strobl, Eric

Abstract

We exploit the geographical variation in climate across India, along with the availability of district-level household expenditure data, to estimate the equilibrium impact of climate on Indian households' living costs. Using a methodology more commonly employed to calculate demographic equivalence scales, we find that households' cost of living decreases by about 0.2% with 100 mm increase in annual precipitation; for every 100 units increases in annual heating degree days and cooling degree days, Indian households would experience an increase by 0.4% and 0.6% in living costs, respectively, and an increase of 1% in annual humidity will raise households' cost of living by 1.3%. Based on these results, we calculate climate equivalence scales for households in major Indian cities.

Suggested Citation

  • Qu, Yuhang & Maddison, David J. & Elliott, Robert J.R. & Strobl, Eric, 2026. "The impact of climate on Indian households' living costs," Ecological Economics, Elsevier, vol. 249(C).
    • Handle: RePEc:eee:ecolec:v:249:y:2026:i:c:s0921800926001291
    DOI: 10.1016/j.ecolecon.2026.109044
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    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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