Climate variations, culture and economic behaviour of Chinese households
Dayong Zhang (),
Qiang Ji () and
Shunsuke Managi ()
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Jun Li: Southwestern University of Finance and Economics
Shunsuke Managi: Kyushu University
Climatic Change, 2021, vol. 167, issue 1, No 9, 18 pages
Abstract Societies adapt to climate variations and develop unique cultures that lead to distinctive economic behaviour across different regions. To estimate the climate-economic link and test the hypothetical role of culture, this paper uses a nationwide survey at the household level in China, together with historical temperature data at the prefectural city level for empirical analysis. The results show the significant role of local climate variations on consumption, savings and investment decisions by households. Harsh weather conditions are associated with lower consumption, lower income and higher savings. Such climate characteristics are also associated with a lower probability of purchasing risky financial assets. Using a sample of migrating families, we find strong evidence that culture is an important channel in the climate-economic relationship. Additional support for this view is found through the “catching up with the Joneses” effect documented in the economics literature. Overall, this research provides an alternative perspective for understanding the long-term behavioural impact of climate change.
Keywords: Climate variation; Culture; Economic behaviour; Household survey (search for similar items in EconPapers)
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