The economic impact of weather anomalies

Gabriel Felbermayr, Jasmin Gröschl, Mark Sanders, Vincent Schippers, Thomas Steinwachs

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

How do weather anomalies affect the economy at the local level? This paper presents a new data set that links weather data to annual average night-light emission data for 24.000 0.5°× 0.5° grid-cells around the globe for the period 1992–2013. Interpreting night-light emission as a proxy for economic activity, these data allow one to investigate how weather anomalies affect economic activity. Global coverage avoids selection bias, while high spatial resolution avoids averaging out heterogeneity in local impacts at higher aggregation levels. Our data show significant effects on the local growth of night-light for storms, excessive precipitation, droughts, and cold spells. Moreover, we find evidence for significant spatial spillovers to neighboring areas. Our results suggest that these offsetting spillovers are typically local. As positive and negative effects average out in larger areas, our results call for the analysis of economic effects of weather anomalies at a high geographical resolution. Finally, our results are driven by events in lower income regions. As climate change is expected to make weather patterns more erratic, our new data can inform emerging debates on how this will affect the economy in both science and politics.
Original languageEnglish
Article number105745
JournalWorld Development
Volume151
DOIs
Publication statusPublished - 1 Mar 2022

JEL classifications

  • f15 - Economic Integration
  • o18 - "Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure"
  • o44 - Environment and Growth
  • q54 - "Climate; Natural Disasters; Global Warming"
  • r12 - Size and Spatial Distributions of Regional Economic Activity

Keywords

  • climate change
  • weather anomalies
  • economic impact
  • local impact
  • night lights
  • spatial spillovers

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