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The Distributional Effects of Climate Change:Evidence from Iran

Author

Listed:
  • Naser Amanzadeh

    (Tehran Institute for Advanced Studies, 17 East Daneshvar St.North Shirazi St., Mollasadra Blvd., Tehran, Iran.)

  • Toshi H. Arimura

    (Faculty of Political Science and Economics & Research Institute for Environmental Economics and Management (RIEEM), Waseda University, 1-6-1 Nishiwaseda, Shinjuku-ku, Tokyo, 169-8050, Japan.)

  • Mohammad Vesal

    (Assistant professor of Economics,Sharif University of Technology, Azadi Ave, Tehran, Iran.)

  • Seyed Farshad Fatemi Ardestani

    (Assistant professor of Economics,Sharif University of Technology, Azadi Ave, Tehran, Iran.)

Abstract

Climate change has a heterogeneous effect across poor and rich households due to differences in vulnerabilities and exposure. Yet, there are very few papers that provide estimates on the magnitude of climate impact across the income distribution. In this paper, we combine 21 rounds of household expenditure and income survey from 1998 to 2018 in Iran to construct a large sample of rural and urban households. Using within district variations in temperature, we show that a one Celsius degree increase in annual temperature respectively leads to an 8.1 and 4.7 percent decrease in rural and urban per capita expenditure. We find that the impact is twice the average effect for the poorest decile. Furthermore, we provide evidence that available household resources that determine vulnerabilities play a more important role than the difference in exposure to climate change. Our findings suggest that compensatory policies should target the poorest households as poverty is a stronger determinant of impact compared to being an agricultural earner or residing in already hot areas.

Suggested Citation

  • Naser Amanzadeh & Toshi H. Arimura & Mohammad Vesal & Seyed Farshad Fatemi Ardestani, 2021. "The Distributional Effects of Climate Change:Evidence from Iran," RIEEM Discussion Paper Series 2007, Research Institute for Environmental Economics and Management, Waseda University.
    • Handle: RePEc:was:dpaper:2007
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    References listed on IDEAS

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    More about this item

    Keywords

    Climate Change; Expenditure distribution; Vulnerability; Poverty;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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