More than a feeling: A global economic valuation of subjective well-being damages resulting from rising temperatures

Stephan Dietrich, Stafford Nichols

Research output: Working paper / PreprintWorking paper

97 Downloads (Pure)

Abstract

Climate impact models are forced to make sweeping assumptions when estimating social and economic welfare damages to countries around the world, because of a lack of data and understanding of local causal mechanisms. In this paper, we estimate the effects of rising temperatures on countries around the world using an experienced utility approach, based on subjective well-being survey data collected in 160 countries for 13 years. We take advantage of 40 years of variation in daily land surface temperature data, to find that one exceptionally hot day significantly lowers well-being. Furthermore, the effect size varies substantially between and within countries. Identifying this high degree of heterogeneity is important because it illustrates the shortcomings of many current models which are geographically coarse. Moreover, we compare the marginal utility of income and non-income effects and find that income accounts for only a small proportion of the damages caused by extreme temperature s. This demonstrates the adverse effect on non-market goods is dramatically higher than previously assumed, which indicates current models are missing a fundamental source of climate-related damages.
Original languageEnglish
PublisherUNU-MERIT
Publication statusPublished - 24 Feb 2023

Publication series

SeriesUNU-MERIT Working Papers
Number005
ISSN1871-9872

JEL classifications

  • i31 - General Welfare
  • q51 - Valuation of Environmental Effects
  • q54 - "Climate; Natural Disasters; Global Warming"
  • o15 - "Economic Development: Human Resources; Human Development; Income Distribution; Migration"

Keywords

  • Global Warming
  • Social Cost of Carbon
  • Climate Damages
  • Subjective Wellbeing
  • Climate Policy

Fingerprint

Dive into the research topics of 'More than a feeling: A global economic valuation of subjective well-being damages resulting from rising temperatures'. Together they form a unique fingerprint.

Cite this