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Households and heat stress: estimating the distributional consequences of climate change

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  • Park, Jisung
  • Bangalore, Mook
  • Hallegatte, Stephane
  • Sandhoefner, Evan

Abstract

Recent research documents the adverse causal impacts on health and productivity of extreme heat, which will worsen with climate change. In this paper, we assess the current distribution of heat exposure within countries, to explore possible distributional consequences of climate change through temperature. Combining survey data from 690,745 households across 52 countries with spatial data on climate, this paper suggests that the welfare impacts of added heat stress may be regressive within countries. We find: (1) a strong negative correlation between household wealth and warmer temperature in many hot countries; (2) a strong positive correlation between household wealth and warmer temperatures in many cold countries; and (3) that poorer individuals are more likely to work in occupations with greater exposure. While our analysis is descriptive rather than causal, our results suggest a larger vulnerability of poor people to heat extremes, and potentially significant distributional and poverty implications of climate change.

Suggested Citation

  • Park, Jisung & Bangalore, Mook & Hallegatte, Stephane & Sandhoefner, Evan, 2018. "Households and heat stress: estimating the distributional consequences of climate change," LSE Research Online Documents on Economics 87547, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:87547
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    References listed on IDEAS

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    1. Joshua Graff Zivin & Matthew Neidell, 2014. "Temperature and the Allocation of Time: Implications for Climate Change," Journal of Labor Economics, University of Chicago Press, vol. 32(1), pages 1-26.
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    3. World Bank, 2017. "World Development Indicators 2017," World Bank Publications, The World Bank, number 26447, July.
    4. E. Somanathan & Rohini Somanathan & Anant Sudarshan & Meenu Tewari, 2021. "The Impact of Temperature on Productivity and Labor Supply: Evidence from Indian Manufacturing," Journal of Political Economy, University of Chicago Press, vol. 129(6), pages 1797-1827.
    5. Alan Barreca & Karen Clay & Olivier Deschenes & Michael Greenstone & Joseph S. Shapiro, 2016. "Adapting to Climate Change: The Remarkable Decline in the US Temperature-Mortality Relationship over the Twentieth Century," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 105-159.
    6. Sinha, Paramita & Caulkins, Martha L. & Cropper, Maureen L., 2018. "Household location decisions and the value of climate amenities," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 608-637.
    7. Lucas W. Davis & Alan Fuchs & Paul Gertler, 2014. "Cash for Coolers: Evaluating a Large-Scale Appliance Replacement Program in Mexico," American Economic Journal: Economic Policy, American Economic Association, vol. 6(4), pages 207-238, November.
    8. Francis Annan & Wolfram Schlenker, 2015. "Federal Crop Insurance and the Disincentive to Adapt to Extreme Heat," American Economic Review, American Economic Association, vol. 105(5), pages 262-266, May.
    9. Geoffrey Heal & Jisung Park, 2016. "Editor's Choice Reflections—Temperature Stress and the Direct Impact of Climate Change: A Review of an Emerging Literature," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(2), pages 347-362.
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    Cited by:

    1. Heilmann, Kilian & Kahn, Matthew E. & Tang, Cheng Keat, 2021. "The urban crime and heat gradient in high and low poverty areas," Journal of Public Economics, Elsevier, vol. 197(C).
    2. R. Jisung Park & Joshua Goodman & Michael Hurwitz & Jonathan Smith, 2020. "Heat and Learning," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 306-339, May.
    3. Céline Guivarch & Nicolas Taconet, 2020. "Inégalités mondiales et changement climatique," Revue de l'OFCE, Presses de Sciences-Po, vol. 165(1), pages 35-70.
    4. Jardine, Sunny L. & Fisher, Mary C. & Moore, Stephanie K. & Samhouri, Jameal F., 2020. "Inequality in the Economic Impacts from Climate Shocks in Fisheries: The Case of Harmful Algal Blooms," Ecological Economics, Elsevier, vol. 176(C).

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    More about this item

    Keywords

    climate change; exposure; heat stress; labor productivity; poverty;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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