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Do High Temperatures Dampen Chinese Urban Household Consumption?

Author

Listed:
  • XUAN CHEN

    (Business School, Beijing Normal University, No. 19, Xinjiekouwai Street, Haidian District, Beijing 100875, P. R. China)

  • LAN-CUI LIU

    (Business School, Beijing Normal University, No. 19, Xinjiekouwai Street, Haidian District, Beijing 100875, P. R. China)

  • JUAN-JUAN HOU

    (Business School, Beijing Normal University, No. 19, Xinjiekouwai Street, Haidian District, Beijing 100875, P. R. China)

  • XUE GAO

    (Business School, Beijing Normal University, No. 19, Xinjiekouwai Street, Haidian District, Beijing 100875, P. R. China)

Abstract

Increased extreme heat is one of the clearest manifestations of climate change, but its impact on household consumption is poorly understood. This paper estimates the effects of high temperatures on total household consumption. We find an inverted U-shaped relationship, with high temperatures (≥ 30∘C) reducing total household consumption by 7.18% compared with the reference group from 5∘C to 10∘C. In the living consumption subcategory, expenditures for eating out decline by 9.59%, whereas expenditures for protective gear, fuel, and housing increase. Expenditures in the going-out category generally decrease but vary with distance, vehicles, and sites. Spending on all types of public transportation and outdoor recreation decreases regardless of distance, whereas private transportation and short-distance indoor recreation expenditures increase slightly. Our findings indicate that households alleviate high-temperature impacts mainly by reducing expenditures outside the home and increasing expenditures on at-home or indoor activities.

Suggested Citation

  • Xuan Chen & Lan-Cui Liu & Juan-Juan Hou & Xue Gao, 2024. "Do High Temperatures Dampen Chinese Urban Household Consumption?," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 15(02), pages 1-23, May.
    • Handle: RePEc:wsi:ccexxx:v:15:y:2024:i:02:n:s2010007823500264
    DOI: 10.1142/S2010007823500264
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