What do we learn from the weather? The new climate-economy literature

Melissa Dell*, Benjamin F. Jones, Benjamin A. Olken

*Corresponding author for this work

Research output: Contribution to journalReview articlepeer-review

486 Scopus citations

Abstract

A rapidly growing body of research applies panel methods to examine how temperature, precipitation, and windstorms influence economic outcomes. These studies focus on changes in weather realizations over time within a given spatial area and demonstrate impacts on agricultural output, industrial output, labor productivity, energy demand, health, conflict, and economic growth, among other outcomes. By harnessing exogenous variation over time within a given spatial unit, these studies help credibly identify (i) the breadth of channels linking weather and the economy, (ii) heterogeneous treatment effects across different types of locations, and (iii) nonlinear effects of weather variables. This paper reviews the new literature with two purposes. First, we summarize recent work, providing a guide to its methodologies, datasets, and findings. Second, we consider applications of the new literature, including insights for the "damage function" within models that seek to assess the potential economic effects of future climate change.

Original languageEnglish (US)
Pages (from-to)740-798
Number of pages59
JournalJournal of Economic Literature
Volume52
Issue number3
DOIs
StatePublished - Sep 1 2014

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint Dive into the research topics of 'What do we learn from the weather? The new climate-economy literature'. Together they form a unique fingerprint.

Cite this