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What Do We Learn from the Weather? The New Climate-Economy Literature

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  • Melissa Dell
  • Benjamin F. Jones
  • Benjamin A. Olken

Abstract

A rapidly growing body of research applies panel methods to examine how temperature, precipitation, and windstorms influence economic outcomes. These studies focus on changes in weather realizations over time within a given spatial area and demonstrate impacts on agricultural output, industrial output, labor productivity, energy demand, health, conflict, and economic growth among other outcomes. By harnessing exogenous variation over time within a given spatial unit, these studies help credibly identify (i) the breadth of channels linking weather and the economy, (ii) heterogeneous treatment effects across different types of locations, and (iii) non-linear effects of weather variables. This paper reviews the new literature with two purposes. First, we summarize recent work, providing a guide to its methodologies, data sets, and findings. Second, we consider applications of the new literature, including insights for the "damage function" within models that seek to assess the potential economic effects of future climate change.

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  • Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2013. "What Do We Learn from the Weather? The New Climate-Economy Literature," NBER Working Papers 19578, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19578
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    Cited by:

    1. de Souza, Joao Paulo A., 2014. "Growth Complementarity Between Agriculture and Industry: Evidence from a Panel of Developing Countries," UMASS Amherst Economics Working Papers 2014-11, University of Massachusetts Amherst, Department of Economics.
    2. Asfaw, Solomon & Mortari, Andrea Piano & Arslan, Aslihan & Karfakis, Panagiotis & Lipper, Leslie, 2015. "Welfare Impacts of Climate Shocks: Evidence from Uganda," 2015 Conference, August 9-14, 2015, Milan, Italy 229060, International Association of Agricultural Economists.
    3. Mesbah Motamed & Raymond Florax & William Masters, 2014. "Agriculture, transportation and the timing of urbanization: Global analysis at the grid cell level," Journal of Economic Growth, Springer, vol. 19(3), pages 339-368, September.
    4. Waage Skjeflo, Sofie & Bruvik Westberg, Nina, 2014. "Learning the hard way? Adapting to climate risk in Tanzania," CLTS Working Papers 4/14, Norwegian University of Life Sciences, Centre for Land Tenure Studies.
    5. Beestermöller, Matthias & Rauch, Ferdinand, 2014. "A Dissection of Trading Capital: Cultural persistence of trade in the aftermath of the fall of the Iron Curtain," Discussion Papers in Economics 21688, University of Munich, Department of Economics.
    6. Isaure Delaporte & Mathilde Maurel, 2018. "Adaptation to climate change in Bangladesh," Climate Policy, Taylor & Francis Journals, vol. 18(1), pages 49-62, January.
    7. Asfaw, Solomon & Mortari, Andrea Piano & Arslan, Aslihan & Karfakis, Panagiotis & Lipper, Leslie, 2015. "Welfare Impacts of Climate Shocks: Evidence from Uganda," 2015 Conference, August 9-14, 2015, Milan, Italy 230217, International Association of Agricultural Economists.
    8. Shrader, Jeffrey, 2014. "Forecasts and Adaptation," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170626, Agricultural and Applied Economics Association.
    9. Matranga, Andrea, 2017. "The Ant and the Grasshopper: Seasonality and the Invention of Agriculture," MPRA Paper 76626, University Library of Munich, Germany.
    10. Vicente Ruiz, 2017. "Do climatic events influence internal migration? Evidence from Mexico," Working Papers 2017.19, FAERE - French Association of Environmental and Resource Economists.
    11. Rodrigo García Ayala & Andrés Estrugo, 2014. "Assessing the Effects of Climate and Socioeconomic Factors on Vulnerability to Vector-Borne Diseases in Latin America," IDB Publications (Working Papers) 85875, Inter-American Development Bank.
    12. Diana Liverman, 2016. "U.S. National climate assessment gaps and research needs: overview, the economy and the international context," Climatic Change, Springer, vol. 135(1), pages 173-186, March.
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    14. Olayide, Olawale Emmanuel & Tetteh, Isaac Kow & Popoola, Labode, 2016. "Differential impacts of rainfall and irrigation on agricultural production in Nigeria: Any lessons for climate-smart agriculture?," Agricultural Water Management, Elsevier, vol. 178(C), pages 30-36.
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    JEL classification:

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

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