Climate Econometrics

Solomon Hsiang ()
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Solomon Hsiang: Goldman School of Public Policy, University of California, Berkeley, California 94720

Annual Review of Resource Economics, 2016, vol. 8, issue 1, 43-75

Abstract: Identifying the effect of climate on societies is central to understanding historical economic development, designing modern policies that react to climatic events, and managing future global climate change. Here, I review, synthesize, and interpret recent advances in methods used to measure effects of climate on social and economic outcomes. Because weather variation plays a large role in recent progress, I formalize the relationship between climate and weather from an econometric perspective and discuss the use of these two factors as identifying variation, highlighting trade-offs between key assumptions in different research designs and deriving conditions when weather variation exactly identifies the effects of climate. I then describe recent advances, such as the parameterization of climate variables from a social perspective, use of nonlinear models with spatial and temporal displacement, characterization of uncertainty, measurement of adaptation, cross-study comparison, and use of empirical estimates to project the impact of future climate change. I conclude by discussing remaining methodological challenges.

Keywords: climate change; weather; disasters; causal inference (search for similar items in EconPapers)
JEL-codes: C33 H84 O13 Q54 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (165)

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