The effects of weather conditions on economic growth: Evidence from global subnational economic output and income

Jinchi Dong (), Jinnan Wang (), Bi Jun and Richard Tol
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Jinchi Dong: The State Key Laboratory of Pollution Control and Resource Reuse, School of the Environment, Nanjing ; Department of Economics, Jubilee Building, University of Sussex
Jinnan Wang: The State Key Laboratory of Pollution Control and Resource Reuse, School of the Environment, Nanjing University, Nanjing ; Chinese Academy of Environmental Planning, Beijing, China
Bi Jun: The State Key Laboratory of Pollution Control and Resource Reuse, School of the Environment, Nanjing University, Nanjing

Working Paper Series from Department of Economics, University of Sussex Business School

Abstract: The effects of weather on economic growth continue to be debated.Previous studies economic output,but income better reflects living standards;income and output are the same at the national level,but differ at a finer spatial scale. This study assembles a unique database comprising global subnational GDP and GDI per capita data from over 1600 regions across more than 180 countries and analyzes the effects of weather conditions on economic growth. There is a significant negative effect of annual mean temperature on income, while weather conditions do not significantly affect output per capita growth. We also find significant interaction effects between weather and weather variability, as well as different adaptations between rich and poor regions.The omission of data from a large number of poor and hot countries in previous subnational research has led to an underestimation of the economic impact of weather shocks.Focusing on output rather than income, previous studies also appear to have underestimated the impact of climate change.

Keywords: climate change; climate damages; gross domestic product; gross domestic income; panel regression (search for similar items in EconPapers)
JEL-codes: O44 Q54 (search for similar items in EconPapers)
Date: 2023-06
New Economics Papers: this item is included in nep-env and nep-gro
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Citations: View citations in EconPapers (2)

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