The Distributional Effects of Climate Change:Evidence from Iran

Naser Amanzadeh (), Toshi Arimura, Mohammad Vesal and Seyed Farshad Fatemi Ardestani
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Seyed Farshad Fatemi Ardestani: Assistant professor of Economics,Sharif University of Technology, Azadi Ave, Tehran, Iran.

RIEEM Discussion Paper Series from Research Institute for Environmental Economics and Management, Waseda University

Abstract: Climate change has a heterogeneous effect across poor and rich households due to differences in vulnerabilities and exposure. Yet, there are very few papers that provide estimates on the magnitude of climate impact across the income distribution. In this paper, we combine 21 rounds of household expenditure and income survey from 1998 to 2018 in Iran to construct a large sample of rural and urban households. Using within district variations in temperature, we show that a one Celsius degree increase in annual temperature respectively leads to an 8.1 and 4.7 percent decrease in rural and urban per capita expenditure. We find that the impact is twice the average effect for the poorest decile. Furthermore, we provide evidence that available household resources that determine vulnerabilities play a more important role than the difference in exposure to climate change. Our findings suggest that compensatory policies should target the poorest households as poverty is a stronger determinant of impact compared to being an agricultural earner or residing in already hot areas.

Keywords: Climate Change; Expenditure distribution; Vulnerability; Poverty (search for similar items in EconPapers)
JEL-codes: D31 I32 Q12 Q51 Q54 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2021-03
New Economics Papers: this item is included in nep-agr, nep-ara, 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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