The link between regional temperature and regional incomes: econometric evidence with sub-national data

Productivity differences between and within countries

Christina Greßer, Daniel Meierrieks and David Stadelmann

Economic Policy, 2021, vol. 36, issue 107, 523-550

Abstract: summaryWe study the link between temperature and economic development at the sub-national level, employing cross-sectional data from two distinct sources. In contrast to much of the existing cross-country literature on the temperature–income relationship, our setting allows for the inclusion of country-fixed effects. Once we account for country-fixed effects, we do not find a statistically robust relationship between regional temperature and three different measures of regional economic development (per capita GDP, nightlights and gross cell production). We also test whether temperature is non-linearly related to regional income (with hotter regions being potentially particularly prone to adverse effects of temperature on income) but find no systematic evidence in favour of such a relationship. Finally, we examine whether the effect of temperature on economic development is especially pronounced in poorer regions (e.g., due to weaker adaptation). Again, we find no statistically robust link.

Keywords: regional temperature; regional economic development; sub-national data; non-linearity (search for similar items in EconPapers)
JEL-codes: Q54 Q56 R11 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Working Paper: The Link between Regional Temperature and Regional Income: Econometric Evidence with Sub-National Data (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ecpoli:v:36:y:2021:i:107:p:523-550.

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