Beyond GDP: Quantifying Heterogeneous Impact of Climate Change on Well-being and Social Progress

The growing interest in assessing societal progress and public policies through the lens of Well-being has garnered significant attention from researchers and policymakers. This study examines the relationship between well-being and global warming across 167 countries from 1990 to 2019, employing the Social Progress Index (SPI) as a measure of well-being. Using a fixed-effects panel data framework, we study temperature impacts by modeling local and global anomalies simultaneously, capturing both within-country and global climate variation. First, a statistically significant negative relationship exists between annual temperature anomalies and well-being, with a 1°C global(local) mean temperature deviation leading to a 0.8324(0.096)-point decline, respectively. Second, precipitation anomalies show no significant effect on the SPI. Third, winter temperature anomalies and cold spells have a greater impact on well-being than other seasons or hot spells. Fourth, poorer regions, hotter climates, the global south, and countries with weak institutions are disproportionately affected by temperature deviations. Fifth, the impact of temperature on well-being persists over the medium term, lasting about four years