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Households and heat stress: estimating the distributional consequences of climate change

Author

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  • Park,Jisung
  • Hallegatte,Stephane
  • Bangalore,Mook
  • Sandhoefner,Evan

Abstract

Recent economic research documents a range of adverse welfare consequences from extreme heat stress, including health, labor productivity, and direct consumption disutility impacts. Without rapid adaptation, climate change will increase the burden of heat stress experienced by much of the world?s population in the coming decades. What will the distributional consequences of this added heat stress be, and how might this affect optimal climate policy? Using detailed survey data of household wealth in 690,745 households across 52 countries, this paper finds evidence suggesting that the welfare impacts of added heat stress caused by climate change may be regressive. Specifically, the analysis finds that poorer households tend to be located in hotter locations across and within countries, and poorer individuals are more likely to work in occupations with greater exposure to the elements not only across but also within countries. These findings?combined with the fact that current social cost of carbon estimates do not include climate damages arising from the productivity impacts of heat stress?suggest that optimal climate policy, especially when allowing for declining marginal utility of consumption, involves more stringent abatement than currently suggested, and that redistributive adaptation policies may be required to reduce the mechanical inequities in welfare impacts arising from climate change.

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  • Park,Jisung & Hallegatte,Stephane & Bangalore,Mook & Sandhoefner,Evan, 2015. "Households and heat stress: estimating the distributional consequences of climate change," Policy Research Working Paper Series 7479, The World Bank.
    • Handle: RePEc:wbk:wbrwps:7479
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    Cited by:

    1. Vona, Francesco, 2023. "Managing the distributional effects of climate policies: A narrow path to a just transition," Ecological Economics, Elsevier, vol. 205(C).
    2. Anaïs E. A. Goubert, 2022. "Slavery, Colonialism, and Ecological Imperialism: Insights from Stratification Economics," American Journal of Economics and Sociology, Wiley Blackwell, vol. 81(3), pages 537-579, May.
    3. R. Jisung Park & Joshua Goodman & Michael Hurwitz & Jonathan Smith, 2020. "Heat and Learning," American Economic Journal: Economic Policy, American Economic Association, vol. 12(2), pages 306-339, May.
    4. Vladimir Otrachshenko & Olga Popova & Nargiza Alimukhamedova, 2024. "Rainfall variability and labor allocation in Uzbekistan: the role of women’s empowerment," Post-Soviet Affairs, Taylor & Francis Journals, vol. 40(2), pages 119-138, March.
    5. Nanda Kaji Budhathoki & Kerstin K. Zander, 2019. "Socio-Economic Impact of and Adaptation to Extreme Heat and Cold of Farmers in the Food Bowl of Nepal," IJERPH, MDPI, vol. 16(9), pages 1-24, May.
    6. Céline Guivarch & Nicolas Taconet, 2020. "Inégalités mondiales et changement climatique," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 35-70.
    7. Jardine, Sunny L. & Fisher, Mary C. & Moore, Stephanie K. & Samhouri, Jameal F., 2020. "Inequality in the Economic Impacts from Climate Shocks in Fisheries: The Case of Harmful Algal Blooms," Ecological Economics, Elsevier, vol. 176(C).
    8. Heilmann, Kilian & Kahn, Matthew E. & Tang, Cheng Keat, 2021. "The urban crime and heat gradient in high and low poverty areas," Journal of Public Economics, Elsevier, vol. 197(C).
    9. Behrer,Arnold Patrick & Bolotnyy,Valentin, 2022. "Heat, Crime, and Punishment," Policy Research Working Paper Series 9909, The World Bank.
    10. Maamoun, Nada & Grünhagen, Caroline & Ward, Hauke & Kornek, Ulrike, 2024. "A Seat at the Table: Distributional impacts of food-price increases due to climate change," EconStor Preprints 281165, ZBW - Leibniz Information Centre for Economics.
    11. Moritz A. Drupp & Ulrike Kornek & Jasper N. Meya & Lutz Sager, 2021. "Inequality and the Environment: The Economics of a Two-Headed Hydra," CESifo Working Paper Series 9447, CESifo.
    12. Yun Qiu & Jinhua Zhao, 2022. "Adaptation and the distributional effects of heat: Evidence from professional archery competitions," Southern Economic Journal, John Wiley & Sons, vol. 88(3), pages 1149-1177, January.
    13. Hélène Benveniste & Michael Oppenheimer & Marc Fleurbaey, 2022. "Climate change increases resource-constrained international immobility," Nature Climate Change, Nature, vol. 12(7), pages 634-641, July.
    14. Vladimir Otrachshenko & Olga Popova, 2022. "Does Weather Sharpen Income Inequality in Russia?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(S1), pages 193-223, April.
    15. Brookes Gray, Harriet & Taraz, Vis & Halliday, Simon D., 2023. "The impact of weather shocks on employment outcomes: evidence from South Africa," Environment and Development Economics, Cambridge University Press, vol. 28(3), pages 285-305, June.
    16. Tien Manh Vu, 2022. "Effects of Heat on Mathematics Test Performance in Vietnam," Asian Economic Journal, East Asian Economic Association, vol. 36(1), pages 72-94, March.
    17. Villalobos, Laura & Gomez, Julian D. & Garcia, Jorge H., 2023. "Technology Attenuates the Impact of Heat on Learning. Evidence from Colombia," EfD Discussion Paper 23-6, Environment for Development, University of Gothenburg.

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    More about this item

    Keywords

    Economic Theory&Research; Global Environment; Climate Change Mitigation and Green House Gases; Science of Climate Change; Climate Change Economics;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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