Shedding Light on the Local Impact of Temperature

By Da Hoang, Duong Trung Le, Ha Nguyen, Nikola Spatafora

August 16, 2024

Preview Citation

Format: Chicago

Da Hoang, Duong Trung Le, Ha Nguyen, and Nikola Spatafora. Shedding Light on the Local Impact of Temperature, (USA: International Monetary Fund, 2024) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We use a new dataset to estimate the impact of temperature on economic activity at a more geographically and temporally disaggregated level than the existing literature. Analyzing 30-kilometer grid cells at a monthly frequency, temperature has a negative, highly statistically significant, and quantitatively large effect on output: a 1 °C increase in monthly temperature is associated with a 0.77 percent reduction in nighttime lights, a proxy for local economic activity. The effects of even a temporary increase in temperature persist for almost one year after the shock. Increases in temperature have an especially large, negative impact on growth in poorer countries, indicating that they are more vulnerable to the impact of climate change.

Subject: Climate change, Environment, Production, Productivity

Keywords: B. data description, Climate change, Economic growth, Global, Google Earth engine, IMF working paper No. 24/178, Impact of temperature, Nighttime lights, Productivity, Temperature, Temperature shock

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2024/178
Stock No:

WPIEA2024178
ISBN:

9798400287305
ISSN:

1018-5941

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