Precipitation, Profits, and Pile-Ups
In considering the economic impacts of climatic changes, economists frequently use annual national income as a proxy for social welfare. I show that such studies suffer from a significant bias, arising from the fact that such models typically ignore changes in mortality rates. Using panel data from Australia, I show that rainfall lowers traffic deaths, suggesting that the standard approach may underestimate the true economic cost of droughts.
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- Robert A Buckle & Kunhong Kim & Heather Kirkham & Nathan McLellan & Jared Sharma, 2002. "A structural VAR model of the New Zealand business cycle," Treasury Working Paper Series 02/26, New Zealand Treasury.
- Adams, P.D & Horridge, M & Madden, J.R & Wittwer, G, 2002.
"Drought, regions and the Australian economy between 2001-02 and 2004-05,"
Australian Bulletin of Labour,
National Institute of Labour Studies, vol. 28(4), pages 231-246.
- Philip D. Adams & Mark Horridge & John Madden & Glyn Wittwer, 2002. "Drought, Regions and the Australian Economy between 2001-02 and 2004-05," Centre of Policy Studies/IMPACT Centre Working Papers g-135, Victoria University, Centre of Policy Studies/IMPACT Centre.
- Mark Horridge & John Madden & Glyn Wittwer, 2003. "Using a highly disaggregated multi-regional single-country model to analyse the impacts of the 2002-03 drought on Australia," Centre of Policy Studies/IMPACT Centre Working Papers g-141, Victoria University, Centre of Policy Studies/IMPACT Centre.
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