Climate impacts on material wealth inequality: global evidence from a subnational dataset

Martina Pardy, Capucine Riom and Roman Hoffmann

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Worsening climatic conditions are a significant threat to livelihoods, health and well-being worldwide. In this paper, we estimate the impact of temperature and precipitation anomalies on inequality and poverty using a dataset combining comprehensive climatological data with subnational regional wealth and inequality measures derived from the Demographic and Health Surveys for 52 countries and 453 regions. Using the International Wealth Index as a comparative measure of material wealth, we find a significant impact of temperature anomalies on the distribution of material wealth. We estimate that an average temperature anomaly of one standard deviation in the past 4 years increases the regional Gini coefficient by 0.018 points and increases the share of extremely poor households by 4.1 percent. The impacts are stronger in rural areas. We find that temperature anomalies affect inequality through multiple channels, including agricultural employment, the deterioration of assets, decreased economic activity, higher unemployment and worsened access to healthcare. The impacts of precipitation anomalies on inequality, on the other hand, are more ambiguous.

Keywords: environment; inequality; regional development (search for similar items in EconPapers)
JEL-codes: I31 Q56 R11 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2024-09-01
New Economics Papers: this item is included in nep-dev, nep-env, nep-geo, nep-hea and nep-ipr
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:125447

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