Affiliation:
1. University of Bayreuth
2. WZB Berlin Social Science Center
3. University of Bayreuth and Center for Research in Economics, Management, and the Arts, Zurich, Switzerland (CREMA)
Abstract
summary
We study the link between temperature and economic development at the sub-national level, employing cross-sectional data from two distinct sources. In contrast to much of the existing cross-country literature on the temperature–income relationship, our setting allows for the inclusion of country-fixed effects. Once we account for country-fixed effects, we do not find a statistically robust relationship between regional temperature and three different measures of regional economic development (per capita GDP, nightlights and gross cell production). We also test whether temperature is non-linearly related to regional income (with hotter regions being potentially particularly prone to adverse effects of temperature on income) but find no systematic evidence in favour of such a relationship. Finally, we examine whether the effect of temperature on economic development is especially pronounced in poorer regions (e.g., due to weaker adaptation). Again, we find no statistically robust link.
Publisher
Oxford University Press (OUP)
Subject
Management, Monitoring, Policy and Law,Economics and Econometrics
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