IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v145y2025ics0140988325002592.html
   My bibliography  Save this article

High temperatures and national saving: Experience in the latest six decades

Author

Listed:
  • Hu, Yiming
  • Liao, Hua

Abstract

This study investigates the impact of climate change on saving rates. Using a geographic gridded data set, we develop a population-weighted high temperature shocks intensity index. We find that an additional percentage point increase in the share of a country’s population exposed to high temperature shocks will increase its saving rate by 0.03 percentage points. This effect is persistent. Additionally, the rise in saving rates is more pronounced in Asia, and in regions with larger high temperature shocks variability (e.g., Australia) and in regions with fast economic growth. More specifically, high temperature shocks can cause savings to rise by strengthening precautionary incentives and changing demographic structures. The findings shed light on how climate change can affect the macroeconomy.

Suggested Citation

  • Hu, Yiming & Liao, Hua, 2025. "High temperatures and national saving: Experience in the latest six decades," Energy Economics, Elsevier, vol. 145(C).
    • Handle: RePEc:eee:eneeco:v:145:y:2025:i:c:s0140988325002592
    DOI: 10.1016/j.eneco.2025.108435
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988325002592
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2025.108435?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Fankhauser, Samuel & S.J. Tol, Richard, 2005. "On climate change and economic growth," Resource and Energy Economics, Elsevier, vol. 27(1), pages 1-17, January.
    2. Marshall Burke & Solomon M. Hsiang & Edward Miguel, 2015. "Global non-linear effect of temperature on economic production," Nature, Nature, vol. 527(7577), pages 235-239, November.
    3. Zhang, Peng & Deschenes, Olivier & Meng, Kyle & Zhang, Junjie, 2018. "Temperature effects on productivity and factor reallocation: Evidence from a half million chinese manufacturing plants," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 1-17.
    4. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    5. Chadwick C. Curtis & Steven Lugauer & Nelson C. Mark, 2015. "Demographic Patterns and Household Saving in China," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(2), pages 58-94, April.
    6. Jody Overland & Christopher D. Carroll & David N. Weil, 2000. "Saving and Growth with Habit Formation," American Economic Review, American Economic Association, vol. 90(3), pages 341-355, June.
    7. Carroll, Christopher D. & Weil, David N., 1994. "Saving and growth: a reinterpretation," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 40(1), pages 133-192, June.
    8. Marcos D. Chamon & Eswar S. Prasad, 2010. "Why Are Saving Rates of Urban Households in China Rising?," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 93-130, January.
    9. Horag Choi & Steven Lugauer & Nelson C. Mark, 2017. "Precautionary Saving of Chinese and U.S. Households," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 49(4), pages 635-661, June.
    10. Garth Heutel & Nolan H. Miller & David Molitor, 2021. "Adaptation and the Mortality Effects of Temperature across U.S. Climate Regions," The Review of Economics and Statistics, MIT Press, vol. 103(4), pages 740-753, October.
    11. Marshall Burke & Kyle Emerick, 2016. "Adaptation to Climate Change: Evidence from US Agriculture," American Economic Journal: Economic Policy, American Economic Association, vol. 8(3), pages 106-140, August.
    12. Curtis, Chadwick C. & Lugauer, Steven & Mark, Nelson C., 2017. "Demographics and aggregate household saving in Japan, China, and India," Journal of Macroeconomics, Elsevier, vol. 51(C), pages 175-191.
    13. Newell, Richard G. & Prest, Brian C. & Sexton, Steven E., 2021. "The GDP-Temperature relationship: Implications for climate change damages," Journal of Environmental Economics and Management, Elsevier, vol. 108(C).
    14. Maximilian Auffhammer & Anin Aroonruengsawat, 2012. "Erratum to: Simulating the impacts of climate change, prices and population on California’s residential electricity consumption," Climatic Change, Springer, vol. 113(3), pages 1101-1104, August.
    15. Fishman, Ram & Carrillo, Paul & Russ, Jason, 2019. "Long-term impacts of exposure to high temperatures on human capital and economic productivity," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 221-238.
    16. Affuso, Ermanno, 2019. "Consumer welfare and climate change in Greenland," Energy Economics, Elsevier, vol. 84(C).
    17. 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).
    18. Sawada, Yasuyuki & Takasaki, Yoshito, 2017. "Natural Disaster, Poverty, and Development: An Introduction," World Development, Elsevier, vol. 94(C), pages 2-15.
    19. Acevedo, Sebastian & Mrkaic, Mico & Novta, Natalija & Pugacheva, Evgenia & Topalova, Petia, 2020. "The Effects of Weather Shocks on Economic Activity: What are the Channels of Impact?," Journal of Macroeconomics, Elsevier, vol. 65(C).
    20. Joshua E. Cinner & W. Neil Adger & Edward H. Allison & Michele L. Barnes & Katrina Brown & Philippa J. Cohen & Stefan Gelcich & Christina C. Hicks & Terry P. Hughes & Jacqueline Lau & Nadine A. Marsha, 2018. "Building adaptive capacity to climate change in tropical coastal communities," Nature Climate Change, Nature, vol. 8(2), pages 117-123, February.
    21. Christopher D. Carroll & Byung-Kun Rhee & Changyong Rhee, 1994. "Are There Cultural Effects on Saving? Some Cross-Sectional Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 685-699.
    22. Orazio P. Attanasio & Agar Brugiavini, 2003. "Social Security and Households' Saving," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 1075-1119.
    23. Chamon, Marcos & Liu, Kai & Prasad, Eswar, 2013. "Income uncertainty and household savings in China," Journal of Development Economics, Elsevier, vol. 105(C), pages 164-177.
    24. Agrawal, Pradeep & Sahoo, Pravakar & Dash, Ranjan Kumar, 2009. "Savings behaviour in South Asia," Journal of Policy Modeling, Elsevier, vol. 31(2), pages 208-224.
    25. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2014. "What Do We Learn from the Weather? The New Climate-Economy Literature," Journal of Economic Literature, American Economic Association, vol. 52(3), pages 740-798, September.
    26. Chloe H. Lucas & Kate I. Booth & Carolina Garcia, 2021. "Insuring homes against extreme weather events: a systematic review of the research," Climatic Change, Springer, vol. 165(3), pages 1-21, April.
    27. Mullins, Jamie T. & White, Corey, 2019. "Temperature and mental health: Evidence from the spectrum of mental health outcomes," Journal of Health Economics, Elsevier, vol. 68(C).
    28. Wangyang Lai & Shanjun Li & Yanyan Liu & Panle Jia Barwick, 2022. "Adaptation mitigates the negative effect of temperature shocks on household consumption," Nature Human Behaviour, Nature, vol. 6(6), pages 837-846, June.
    29. Kalkuhl, Matthias & Wenz, Leonie, 2020. "The impact of climate conditions on economic production. Evidence from a global panel of regions," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    30. Brown, Philip & Daigneault, Adam J. & Tjernström, Emilia & Zou, Wenbo, 2018. "Natural disasters, social protection, and risk perceptions," World Development, Elsevier, vol. 104(C), pages 310-325.
    31. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2012. "Temperature Shocks and Economic Growth: Evidence from the Last Half Century," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 66-95, July.
    32. Carroll, Christopher D & Rhee, Byung-Kun & Rhee, Changyong, 1999. "Does Cultural Origin Affect Saving Behavior? Evidence from Immigrants," Economic Development and Cultural Change, University of Chicago Press, vol. 48(1), pages 33-50, October.
    33. Brenden Jongman & Stefan Hochrainer-Stigler & Luc Feyen & Jeroen C. J. H. Aerts & Reinhard Mechler & W. J. Wouter Botzen & Laurens M. Bouwer & Georg Pflug & Rodrigo Rojas & Philip J. Ward, 2014. "Increasing stress on disaster-risk finance due to large floods," Nature Climate Change, Nature, vol. 4(4), pages 264-268, April.
    34. repec:cdl:econwp:qt3g72r0zv is not listed on IDEAS
    35. Johan F.M. Swinnen & Anneleen Vandeplas & Miet Maertens, 2010. "Liberalization, Endogenous Institutions, and Growth: A Comparative Analysis of Agricultural Reforms in Africa, Asia, and Europe," The World Bank Economic Review, World Bank, vol. 24(3), pages 412-445, December.
    36. Lisa Cameron & Manisha Shah, 2015. "Risk-Taking Behavior in the Wake of Natural Disasters," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 484-515.
    37. Xiaofen Chen, 2017. "Globalization and household saving: is there a link?," Applied Economics, Taylor & Francis Journals, vol. 49(29), pages 2797-2816, June.
    38. Olivier Deschênes & Michael Greenstone, 2011. "Climate Change, Mortality, and Adaptation: Evidence from Annual Fluctuations in Weather in the US," American Economic Journal: Applied Economics, American Economic Association, vol. 3(4), pages 152-185, October.
    39. Chen Zhang & Hua Liao & Zhifu Mi, 2019. "Climate impacts: temperature and electricity consumption," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 99(3), pages 1259-1275, December.
    40. Chie Hanaoka & Hitoshi Shigeoka & Yasutora Watanabe, 2018. "Do Risk Preferences Change? Evidence from the Great East Japan Earthquake," American Economic Journal: Applied Economics, American Economic Association, vol. 10(2), pages 298-330, April.
    41. Jayatilleke S. Bandara & Yiyong Cai, 2014. "The impact of climate change on food crop productivity, food prices and food security in South Asia," Economic Analysis and Policy, Elsevier, vol. 44(4), pages 451-465.
    42. Emanuele Campiglio & Yannis Dafermos & Pierre Monnin & Josh Ryan-Collins & Guido Schotten & Misa Tanaka, 2018. "Climate change challenges for central banks and financial regulators," Nature Climate Change, Nature, vol. 8(6), pages 462-468, June.
    43. Donadelli, Michael & Grüning, Patrick & Jüppner, Marcus & Kizys, Renatas, 2021. "Global temperature, R&D expenditure, and growth," Energy Economics, Elsevier, vol. 104(C).
    44. Love, Inessa & Zicchino, Lea, 2006. "Financial development and dynamic investment behavior: Evidence from panel VAR," The Quarterly Review of Economics and Finance, Elsevier, vol. 46(2), pages 190-210, May.
    45. Campagnolo, Lorenza & De Cian, Enrica, 2022. "Distributional consequences of climate change impacts on residential energy demand across Italian households," Energy Economics, Elsevier, vol. 110(C).
    46. Li, Hongbin & Zhang, Jie & Zhang, Junsen, 2007. "Effects of longevity and dependency rates on saving and growth: Evidence from a panel of cross countries," Journal of Development Economics, Elsevier, vol. 84(1), pages 138-154, September.
    47. Maximilian Kotz & Leonie Wenz & Annika Stechemesser & Matthias Kalkuhl & Anders Levermann, 2021. "Day-to-day temperature variability reduces economic growth," Nature Climate Change, Nature, vol. 11(4), pages 319-325, April.
    48. Justin Gallagher, 2014. "Learning about an Infrequent Event: Evidence from Flood Insurance Take-Up in the United States," American Economic Journal: Applied Economics, American Economic Association, vol. 6(3), pages 206-233, July.
    49. Laura Bakkensen & Lint Barrage, 2018. "Climate Shocks, Cyclones, and Economic Growth: Bridging the Micro-Macro Gap," NBER Working Papers 24893, National Bureau of Economic Research, Inc.
    50. Norman Loayza & Klaus Schmidt-Hebbel & Luis Servén, 2000. "Saving in Developing Countries: An Overview," The World Bank Economic Review, World Bank, vol. 14(3), pages 393-414, September.
    51. William Nordhaus & Xi Chen, 2015. "A sharper image? Estimates of the precision of nighttime lights as a proxy for economic statistics," Journal of Economic Geography, Oxford University Press, vol. 15(1), pages 217-246.
    52. repec:cdl:econwp:qt28c3c631 is not listed on IDEAS
    53. Alberto Salvo, 2018. "Electrical appliances moderate households’ water demand response to heat," Nature Communications, Nature, vol. 9(1), pages 1-14, December.
    54. repec:jhu:papers:357 is not listed on IDEAS
    55. Barbier, Edward B. & Hochard, Jacob P., 2018. "Poverty, rural population distribution and climate change," Environment and Development Economics, Cambridge University Press, vol. 23(3), pages 234-256, June.
    56. Zhang, Shaohui & Guo, Qinxin & Smyth, Russell & Yao, Yao, 2022. "Extreme temperatures and residential electricity consumption: Evidence from Chinese households," Energy Economics, Elsevier, vol. 107(C).
    57. Yu, Xiumei & Lei, Xiaoyan & Wang, Min, 2019. "Temperature effects on mortality and household adaptation: Evidence from China," Journal of Environmental Economics and Management, Elsevier, vol. 96(C), pages 195-212.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chang, Jun-Jie & Mi, Zhifu & Wei, Yi-Ming, 2023. "Temperature and GDP: A review of climate econometrics analysis," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 383-392.
    2. Bui, Thanh-Huong & Bui, Ha-Phuong & Pham, Thi Mai-Anh, 2024. "Effects of temperature on job insecurity: Evidence from Australia," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 264-276.
    3. Tol, Richard S.J., 2024. "A meta-analysis of the total economic impact of climate change," Energy Policy, Elsevier, vol. 185(C).
    4. Hai‐Anh H. Dang & Stephane Hallegatte & Trong‐Anh Trinh, 2024. "Does global warming worsen poverty and inequality? An updated review," Journal of Economic Surveys, Wiley Blackwell, vol. 38(5), pages 1873-1905, December.
    5. Nikhil Kaushik & Ashish Sharma & Poornima Mishra & Sunil Kumar, 2024. "Temperature Rising, Growth Descending: Climate Change Impacts on Asian Economies," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 16(3), pages 295-320, September.
    6. Gregory Casey & Stephie Fried & Ethan Goode, 2023. "Projecting the Impact of Rising Temperatures: The Role of Macroeconomic Dynamics," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(3), pages 688-718, September.
    7. Kahn, Matthew E. & Mohaddes, Kamiar & Ng, Ryan N.C. & Pesaran, M. Hashem & Raissi, Mehdi & Yang, Jui-Chung, 2021. "Long-term macroeconomic effects of climate change: A cross-country analysis," Energy Economics, Elsevier, vol. 104(C).
    8. Feriga,Moustafa Amgad Moustafa Ahmed Moustafa & Lozano Gracia,Nancy & Serneels,Pieter Maria, 2024. "The Impact of Climate Change on Work : Lessons for Developing Countries," Policy Research Working Paper Series 10682, The World Bank.
    9. Acevedo, Sebastian & Mrkaic, Mico & Novta, Natalija & Pugacheva, Evgenia & Topalova, Petia, 2020. "The Effects of Weather Shocks on Economic Activity: What are the Channels of Impact?," Journal of Macroeconomics, Elsevier, vol. 65(C).
    10. Tarsia, Romano, 2024. "Heterogeneous effects of weather shocks on firm economic performance," LSE Research Online Documents on Economics 124251, London School of Economics and Political Science, LSE Library.
    11. Jiao, Xiyu & Pretis, Felix & Schwarz, Moritz, 2024. "Testing for coefficient distortion due to outliers with an application to the economic impacts of climate change," Journal of Econometrics, Elsevier, vol. 239(1).
    12. Linsenmeier, Manuel, 2023. "Temperature variability and long-run economic development," Journal of Environmental Economics and Management, Elsevier, vol. 121(C).
    13. Ouyang, Yanyan & Wang, Shengquan & Weng, Dabin & Zhang, Wenhao, 2024. "Temperature and domestic trade: City evidence from China," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 130-149.
    14. Nguyen, Ha Minh, 2024. "Beyond the annual averages: Impact of seasonal temperature on employment growth in US counties," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    15. Li, Xue & Smyth, Russell & Yao, Yao, 2023. "Extreme temperatures and out-of-pocket medical expenditure: Evidence from China," China Economic Review, Elsevier, vol. 77(C).
    16. Jiang, Lei & Yang, Linshuang & Wu, Qingyang & Zhang, Xinyue, 2024. "How does extreme heat affect carbon emission intensity? Evidence from county-level data in China," Economic Modelling, Elsevier, vol. 139(C).
    17. Song, Malin & Wang, Jianlin & Zhao, Jiajia, 2023. "Effects of rising and extreme temperatures on production factor efficiency: Evidence from China's cities," International Journal of Production Economics, Elsevier, vol. 260(C).
    18. Desbordes, Rodolphe & Eberhardt, Markus, 2024. "Climate change and economic prosperity: Evidence from a flexible damage function," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    19. Li Chen & Bin Jiang & Chuan Wang, 2023. "Climate change and urban total factor productivity: evidence from capital cities and municipalities in China," Empirical Economics, Springer, vol. 65(1), pages 401-441, July.
    20. Wang, Hai-jie & Tang, Kai, 2023. "Extreme climate, innovative ability and energy efficiency," Energy Economics, Elsevier, vol. 120(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:145:y:2025:i:c:s0140988325002592. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.