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The economic impact of weather anomalies

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  • Felbermayr, Gabriel
  • Gröschl, Jasmin
  • Sanders, Mark
  • Schippers, Vincent
  • Steinwachs, Thomas

Abstract

How do weather anomalies affect the economy at the local level? This paper presents a new data set that links weather data to annual average night-light emission data for 24.000 0.5°× 0.5° grid-cells around the globe for the period 1992–2013. Interpreting night-light emission as a proxy for economic activity, these data allow one to investigate how weather anomalies affect economic activity. Global coverage avoids selection bias, while high spatial resolution avoids averaging out heterogeneity in local impacts at higher aggregation levels. Our data show significant effects on the local growth of night-light for storms, excessive precipitation, droughts, and cold spells. Moreover, we find evidence for significant spatial spillovers to neighboring areas. Our results suggest that these offsetting spillovers are typically local. As positive and negative effects average out in larger areas, our results call for the analysis of economic effects of weather anomalies at a high geographical resolution. Finally, our results are driven by events in lower income regions. As climate change is expected to make weather patterns more erratic, our new data can inform emerging debates on how this will affect the economy in both science and politics.

Suggested Citation

  • Felbermayr, Gabriel & Gröschl, Jasmin & Sanders, Mark & Schippers, Vincent & Steinwachs, Thomas, 2022. "The economic impact of weather anomalies," World Development, Elsevier, vol. 151(C).
  • Handle: RePEc:eee:wdevel:v:151:y:2022:i:c:s0305750x21003600
    DOI: 10.1016/j.worlddev.2021.105745
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    3. Shapiro, Daniel & Oh, Chang Hoon & Zhang, Peng, 2023. "Nighttime lights data and their implications for IB research," Journal of International Management, Elsevier, vol. 29(5).
    4. Saura, Jose Ramon & Ribeiro-Navarrete, Samuel & Palacios-Marqués, Daniel & Mardani, Abbas, 2023. "Impact of extreme weather in production economics: Extracting evidence from user-generated content," International Journal of Production Economics, Elsevier, vol. 260(C).
    5. Haddis Solomon & Yoko Kijima, 2022. "Does Land Certification Mitigate the Negative Impact of Weather Shocks? Evidence from Rural Ethiopia," Sustainability, MDPI, vol. 14(19), pages 1-17, October.
    6. Palacios, Paola & Rojas-Velásquez, Libardo, 2023. "Impact of weather shocks on educational outcomes in the municipalities of Colombia," International Journal of Educational Development, Elsevier, vol. 101(C).
    7. Ciccarelli, Matteo & Kuik, Friderike & Martínez Hernández, Catalina, 2023. "The asymmetric effects of weather shocks on euro area inflation," Working Paper Series 2798, European Central Bank.
    8. Marc Gronwald, 2023. "Explosive Temperatures," CESifo Working Paper Series 10680, CESifo.
    9. Beyer, Robert C. M. & Narayanan, Abhinav & Thakur, Gogol Mitra, 2022. "Natural Disasters and Economic Dynamics: Evidence from the Kerala Floods," Working Papers 22/383, National Institute of Public Finance and Policy.
    10. Robert Reinhardt, 2022. "Shaking up Foreign Finance: FDI in a Post-Disaster World," Documents de travail du Centre d'Economie de la Sorbonne 22024r, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne, revised Sep 2023.
    11. Schling, Maja & Guerrero Compeán, Roberto & Pazos, Nicolás & Bailey, Allison & Arkema, Katie & Ruckelshaus, Mary, 2022. "The Economic Impact of Sargassum: Evidence from the Mexican Coast," IDB Publications (Working Papers) 12460, Inter-American Development Bank.
    12. Vinzenz Peters & Jingtian Wang & Mark Sanders, 2023. "Resilience to extreme weather events and local financial structure of prefecture-level cities in China," Climatic Change, Springer, vol. 176(9), pages 1-21, September.
    13. Qin, Meng & Su, Chi-Wei & Umar, Muhammad & Lobonţ, Oana-Ramona & Manta, Alina Georgiana, 2023. "Are climate and geopolitics the challenges to sustainable development? Novel evidence from the global supply chain," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 748-763.
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    More about this item

    Keywords

    Climate change; Weather anomalies; Economic impact; Local impact; Night lights; Spatial spillovers;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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