Precipitation, Profits, and Pile-Ups

Andrew Keith Leigh ()

No 629, CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University

Abstract: In considering the economic impacts of climatic changes, economists frequently use annual national income as a proxy for social welfare. I show that such studies suffer from a significant bias, arising from the fact that such models typically ignore changes in mortality rates. Using panel data from Australia, I show that rainfall lowers traffic deaths, suggesting that the standard approach may underestimate the true economic cost of droughts.

Keywords: national income; social welfare; rainfall; traffic fatalities (search for similar items in EconPapers)
JEL-codes: I12 I31 J17 Q25 (search for similar items in EconPapers)
Date: 2009-12
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Persistent link: http://EconPapers.repec.org/RePEc:auu:dpaper:629

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