Department of Economics
1805 Cambridge Street
Cambridge, MA 02138
NBER Working Papers and Publications
|April 2015||Goldilocks Economies? Temperature Stress and the Direct Impacts of Climate Change|
with Geoffrey Heal: w21119
We review recent literature on the effect of temperature stress on economic activity, operating through basic human physiology. There is growing evidence from both micro and macro studies of causal impacts of extreme temperature on health, labor supply, and labor productivity, driven in large part by extreme heat stress. There is also a suggestion of an optimal temperature zone for economic activity, though empirical research on potential adaptive responses remains thin. This emerging literature has implications for the consequence of climate change, and may also provide a partial explanation of why hot countries are generally poorer than temperate or cold ones.
|December 2013||Feeling the Heat: Temperature, Physiology & the Wealth of Nations|
with Geoffrey Heal: w19725
Does temperature affect economic performance? Has temperature always affected social welfare through its impact on physical and cognitive function? While many economic studies have explored the indirect links between climate and welfare (e.g. agriculture, conflict, sea-level rise), few address the possibility of direct impacts operating through physiology, despite a deep medical literature documenting the temperature sensitivity of human task performance. This paper attempts a synthesis of these literatures by (1) presenting a microeconomic model of labor supply under thermal stress, and (2) using country-level panel data on temperature and income (1950-2005) to illustrate the potential magnitude of temperature- driven productivity impacts. Using a fixed effects estimation strategy, we fin...