Does hotter temperature increase poverty and inequality? Global evidence from subnational data analysis

Hai-Anh Dang (), Minh Cong Nguyen and Trong-Anh Trinh

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

Abstract: Despite a vast literature documenting the harmful effects of climate change on various socioeconomic outcomes, little evidence exists on the global impacts of hotter temperature on poverty and inequality. Analysis of a new global panel dataset of subnational poverty in 134 countries finds that a one-degree Celsius increase in temperature leads to a 9.1 percent increase in poverty, using the US$1.90 daily poverty threshold. A similar increase in temperature causes a 1.4 percent increase in the Gini inequality index. The paper also finds negative effects of colder temperature on poverty and inequality. Yet, while poorer countries—particularly those in South Asia and Sub-Saharan Africa—are more affected by climate change, household adaptation could have mitigated some adverse effects in the long run. The findings provide relevant and timely inputs for the global fight against climate change as well as the current policy debate on the responsibilities of richer countries versus poorer countries.

Keywords: climate change; temperature; poverty; inequality; subnational data (search for similar items in EconPapers)
JEL-codes: I32 O10 Q54 (search for similar items in EconPapers)
Pages: 80 pages
Date: 2023-09-01
New Economics Papers: this item is included in nep-agr, nep-dev and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://eprints.lse.ac.uk/120156/ Open access version. (application/pdf)

Related works:
Working Paper: Does Hotter Temperature Increase Poverty and Inequality? Global Evidence from Subnational Data Analysis (2025)
Working Paper: Does Hotter Temperature Increase Poverty and Inequality ? Global Evidence from Subnational Data Analysis (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:120156

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