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The Value of Climate Amenities: Evidence from US Migration Decisions

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  • Sinha, Paramita
  • Cropper, Maureen L.

    () (Resources for the Future)

Abstract

We value climate amenities by estimating a discrete location choice model for households that changed metropolitan statistical areas (MSAs) between 1995 and 2000. The utility of each MSA depends on location-specific amenities, earnings opportunities, housing costs, and the cost of moving to the MSA from the household’s 1995 location. We use the estimated trade-off between wages and climate amenities to value changes in mean winter and summer temperatures. At median temperatures for 1970 to 2000, a 1°F increase in winter temperature is worth less than a 1° decrease in summer temperature; however, the reverse is true at winter temperatures below 25°F. These results imply an average welfare loss of 2.7 percent of household income in 2020 to 2050 under the B1 (climate-friendly) scenario from the special report on emissions scenarios (Intergovernmental Panel on Climate Change 2000), although some cities in the Northeast and Midwest benefit. Under the A2 (more extreme) scenario, households in 25 of 26 cities suffer an average welfare loss equal to 5 percent of income.

Suggested Citation

  • Sinha, Paramita & Cropper, Maureen L., 2013. "The Value of Climate Amenities: Evidence from US Migration Decisions," Discussion Papers dp-13-01, Resources For the Future.
  • Handle: RePEc:rff:dpaper:dp-13-01
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    References listed on IDEAS

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    Cited by:

    1. David Albouy & Walter Graf & Ryan Kellogg & Hendrik Wolff, 2016. "Climate Amenities, Climate Change, and American Quality of Life," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(1), pages 205-246.
    2. Liang Zheng, 2016. "What city amenities matter in attracting smart people?," Papers in Regional Science, Wiley Blackwell, vol. 95(2), pages 309-327, June.
    3. Christopher Severen & Christopher Costello & Olivier Deschenes, 2016. "A Forward Looking Ricardian Approach: Do Land Markets Capitalize Climate Change Forecasts?," NBER Working Papers 22413, National Bureau of Economic Research, Inc.
    4. Benjamin Wirth, 2013. "Ranking German regions using interregional migration - What does internal migration tells us about regional well-being?," ERSA conference papers ersa13p1254, European Regional Science Association.
    5. Michael Klien, 2016. "Austria 2025 – Perspectives of a Regionally Differentiated Housing and Transport Policy Against the Backdrop of Demographic Change in Austria," WIFO Monatsberichte (monthly reports), WIFO, vol. 89(11), pages 799-808, November.
    6. H. Allen Klaiber & Joshua Abbott & V. Kerry Smith, 2015. "Some Like it (Less) Hot: Extracting Tradeoff Measures for Physically Coupled Amenities," NBER Working Papers 21051, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    climate amenities; discrete choice models; migration; welfare impacts of temperature changes;

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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