IDEAS home Printed from https://ideas.repec.org/p/auu/dpaper/629.html
   My bibliography  Save this paper

Precipitation, Profits, and Pile-Ups

Author

Listed:
  • Andrew Leigh

Abstract

In considering the economic impacts of climatic changes, economists frequently use annual national income as a proxy for social welfare. I show that such studies suffer from a significant bias, arising from the fact that such models typically ignore changes in mortality rates. Using panel data from Australia, I show that rainfall lowers traffic deaths, suggesting that the standard approach may underestimate the true economic cost of droughts.

Suggested Citation

  • Andrew Leigh, 2009. "Precipitation, Profits, and Pile-Ups," CEPR Discussion Papers 629, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    • Handle: RePEc:auu:dpaper:629
    as

    Download full text from publisher

    File URL: https://www.cbe.anu.edu.au/researchpapers/CEPR/DP629.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lan Lu & David Hedley, 2004. "The impact of the 2002-03 drought on the economy and agricultural employment," Economic Roundup, The Treasury, Australian Government, issue 1, pages 25-43, April.
    2. Mark Horridge & John Madden & Glyn Wittwer, 2003. "Using a highly disaggregated multi-regional single-country model to analyse the impacts of the 2002-03 drought on Australia," Centre of Policy Studies/IMPACT Centre Working Papers g-141, Victoria University, Centre of Policy Studies/IMPACT Centre.
    3. Robert A Buckle & Kunhong Kim & Heather Kirkham & Nathan McLellan & Jared Sharma, 2002. "A structural VAR model of the New Zealand business cycle," Treasury Working Paper Series 02/26, New Zealand Treasury.
    4. Sardar Islam & Matthew Clarke, 2002. "The Relationship between Economic Development and Social Welfare: A New Adjusted GDP Measure of Welfare," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 57(2), pages 201-229, February.
    5. Philip D. Adams & Mark Horridge & John Madden & Glyn Wittwer, 2002. "Drought, Regions and the Australian Economy between 2001-02 and 2004-05," Centre of Policy Studies/IMPACT Centre Working Papers g-135, Victoria University, Centre of Policy Studies/IMPACT Centre.
    6. Adams, P.D & Horridge, M & Madden, J.R & Wittwer, G, 2002. "Drought, regions and the Australian economy between 2001-02 and 2004-05," Australian Bulletin of Labour, National Institute of Labour Studies, vol. 28(4), pages 231-246.
    7. Edgardo Sica, 2005. "Climatic differences and Economic Growth across Italian Provinces: First Empirical Evidence," Quaderni DSEMS 20-2005, Dipartimento di Scienze Economiche, Matematiche e Statistiche, Universita' di Foggia.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:ipf:psejou:v:42:y:2018:i:42:p:45-65 is not listed on IDEAS
    2. Pavel A. Yakovlev & Christina M. Orr-Magulick, 2018. "On the road again: traffic fatalities and auto insurance minimums," Public Sector Economics, Institute of Public Finance, vol. 42(1), pages 45-65.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Siddiqui, Rizwana, 2006. "Modelling Gender Dimensions of the Impact Of Economic Reforms in Pakistan," Conference papers 331468, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Jayatilleke S. Bandara & Athula Naranpanawa, 2007. "The Economic Effects of the Asian Tsunami on the ‘Tear Drop in the Indian Ocean’," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 8(1), pages 65-85, January.
    3. Sheng, Yu & Xu, Xinpeng, 2019. "The productivity impact of climate change: Evidence from Australia's Millennium drought," Economic Modelling, Elsevier, vol. 76(C), pages 182-191.
    4. Mushtaq, Shahbaz & Cockfield, Geoff & White, Neil & Jakeman, Guy, 2014. "Modelling interactions between farm-level structural adjustment and a regional economy: A case of the Australian rice industry," Agricultural Systems, Elsevier, vol. 123(C), pages 34-42.
    5. Wittwer, Glyn, 2022. "Preparing a multi-country, sub-national CGE model: EuroTERM including Ukraine," Conference papers 333470, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Satish Kumar & Filomena Maggino & Raj V. Mahto & Riya Sureka & Leonardo Salvatore Alaimo & Weng Marc Lim, 2022. "Social Indicators Research: A Retrospective Using Bibliometric Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 162(1), pages 413-448, July.
    7. Mr. Sebastian Sosa & Mr. Paul Cashin, 2009. "Macroeconomic Fluctuations in the Caribbean: The Role of Climatic and External Shocks," IMF Working Papers 2009/159, International Monetary Fund.
    8. Viv B. Hall & C. John McDermott, 2007. "Regional business cycles in New Zealand: Do they exist? What might drive them?," Papers in Regional Science, Wiley Blackwell, vol. 86(2), pages 167-191, June.
    9. Unknown, 2005. "Trends in Australian Agriculture," Commission Research Papers 31903, Productivity Commission.
    10. Susie McKenzie, 2024. "How vulnerable is New Zealand to economic shocks in its major trading partners?," Treasury Analytical Notes Series an24/04, New Zealand Treasury.
    11. Thai, Mai Thi Thanh & Turkina, Ekaterina, 2014. "Macro-level determinants of formal entrepreneurship versus informal entrepreneurship," Journal of Business Venturing, Elsevier, vol. 29(4), pages 490-510.
    12. Horridge, Mark & Wittwer, Glyn, 2008. "SinoTERM, a multi-regional CGE model of China," China Economic Review, Elsevier, vol. 19(4), pages 628-634, December.
    13. Wittwer, Glyn & McKirdy, Simon & Wilson, Ryan, 2005. "Regional economic impacts of a plant disease incursion using a general equilibrium approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(01), pages 1-15.
    14. Pham Van Ha & Hoa Thi Minh Nguyen & Tom Kompas & Tuong Nhu Che & Bui Trinh, 2015. "Rice Production, Trade and the Poor: Regional Effects of Rice Export Policy on Households in Vietnam," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(2), pages 280-307, June.
    15. Bordo, Michael & Hargreaves, David & Kida, Mizuho, 2011. "Global shocks, economic growth and financial crises: 120 years of New Zealand experience," Financial History Review, Cambridge University Press, vol. 18(3), pages 331-355, December.
    16. repec:ers:journl:v:xv:y:2012:i:sie:p:133-144 is not listed on IDEAS
    17. Alfred A. Haug & Christie Smith, 2012. "Local Linear Impulse Responses for a Small Open Economy," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 74(3), pages 470-492, June.
    18. Matthew Clarke & Sardar M.N. Islam, 2005. "The relationship between national income and health: a new measure applied to Bangkok," Progress in Development Studies, , vol. 5(3), pages 182-198, July.
    19. Cashin, Paul & Mohaddes, Kamiar & Raissi, Mehdi, 2017. "Fair weather or foul? The macroeconomic effects of El Niño," Journal of International Economics, Elsevier, vol. 106(C), pages 37-54.
    20. Robert Buckle & Kunhong Kim & Julie Tam, 2002. "A structural var approach to estimating budget balance targets," New Zealand Economic Papers, Taylor & Francis Journals, vol. 36(2), pages 149-175.
    21. Daneshzand, Farzaneh & Asali, Mehdi & Al-Sobhi, Saad A. & Diabat, Ali & Elkamel, Ali, 2022. "A simulation-based optimization scheme for phase-out of natural gas subsidies considering welfare and economic measures," Energy, Elsevier, vol. 259(C).

    More about this item

    Keywords

    national income; social welfare; rainfall; traffic fatalities;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:auu:dpaper:629. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/cpanuau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.