Does Hotter Temperature Increase Poverty? Global Evidence from Subnational Data Analysis

Hai-Anh Dang (), Minh Nguyen and Trong-Anh Trinh

No 622, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: Despite a vast literature documenting climate change negative effects on various socio-economic outcomes, surprisingly hardly any evidence exists on the global impacts of hotter temperature on poverty. Analyzing a new global panel dataset of subnational poverty in 139 countries, we find higher temperature to increase poverty. Our panel fixed effects model shows that a 1°C increase leads to a 9.1 percent increase in poverty, using the US$ 1.90 daily poverty threshold. The estimated poverty increase is lower at 5.2 percent for the long-differences model, which suggests potential long-run adaptation. Regional heterogeneity exists, with Sub-Saharan African and South Asian countries being most vulnerable to higher temperature. We find suggestive evidence that reductions in crop yields could be a key channel that explains the effects of rising temperature. Further simulation indicates that global warming effects could be more pronounced in poorer regions and under scenarios of higher greenhouse gas emissions without mitigation policies.

Keywords: Climate change; global warming; poverty; agriculture; subnational data (search for similar items in EconPapers)
JEL-codes: I32 O1 Q54 (search for similar items in EconPapers)
Pages: 66 pages
Date: 2022-09
New Economics Papers: this item is included in nep-agr, nep-dev and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.ecineq.org/milano/WP/ECINEQ2022-622.pdf First version, 2022 (application/pdf)

Related works:
Working Paper: Does Hotter Temperature Increase Poverty? Global Evidence from Subnational Data Analysis (2022)
Working Paper: Does Hotter Temperature Increase Poverty? Global Evidence from Subnational Data Analysis (2022)
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