Temperature and Income: Reconciling New Cross-Sectional and Panel Estimates

This paper provides new evidence on the relationship between temperature and income. Using subnational data from 12 countries in the Americas, it shows that the negative cross-sectional relationship between temperature and income exists within countries, as well as across countries. The paper then p...

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Bibliographic Details
Published in:The American economic review 2009-05, Vol.99 (2), p.198-204
Main Authors: Dell, Melissa, Jones, Benjamin F., Olken, Benjamin A.
Format: Article
Language:English
Subjects:
Census of Population
Censuses
Climate
Climate change
Climate change adaptation
Climate models
Correlation
Correlation analysis
Countries
Cross-sectional analysis
Datasets
Economic impact analysis
Estimates
Estimation
GDP
Geography
Global warming
Gross Domestic Product
Income
Income estimates
Manycountries
North-South relations
Per capita
Poverty
Precipitation
Standard deviation
Studies
Temperature
Temperature effects
Temperature gradients
The Economic Impacts of Climate Change
Weather
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Summary:This paper provides new evidence on the relationship between temperature and income. Using subnational data from 12 countries in the Americas, it shows that the negative cross-sectional relationship between temperature and income exists within countries, as well as across countries. The paper then provides a theoretical framework for reconciling the substantial, negative association between temperature and income in cross section with the even stronger short-run effects of temperature shown in panel models. The theoretical framework suggests that half of the negative short-term effects of temperature are offset in the long run through adaptation.
ISSN:0002-8282
1944-7981
DOI:10.1257/aer.99.2.198