IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/120156.html
   My bibliography  Save this paper

Does hotter temperature increase poverty and inequality? Global evidence from subnational data analysis

Author

Listed:
  • Dang, Hai-Anh H.
  • Cong Nguyen, Minh
  • Trinh, Trong-Anh

Abstract

Despite a vast literature documenting the harmful effects of climate change on various socioeconomic outcomes, little evidence exists on the global impacts of hotter temperature on poverty and inequality. Analysis of a new global panel dataset of subnational poverty in 134 countries finds that a one-degree Celsius increase in temperature leads to a 9.1 percent increase in poverty, using the US$1.90 daily poverty threshold. A similar increase in temperature causes a 1.4 percent increase in the Gini inequality index. The paper also finds negative effects of colder temperature on poverty and inequality. Yet, while poorer countries—particularly those in South Asia and Sub-Saharan Africa—are more affected by climate change, household adaptation could have mitigated some adverse effects in the long run. The findings provide relevant and timely inputs for the global fight against climate change as well as the current policy debate on the responsibilities of richer countries versus poorer countries.

Suggested Citation

  • Dang, Hai-Anh H. & Cong Nguyen, Minh & Trinh, Trong-Anh, 2023. "Does hotter temperature increase poverty and inequality? Global evidence from subnational data analysis," LSE Research Online Documents on Economics 120156, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:120156
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/120156/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    2. Hai‐Anh H. Dang & Stephane Hallegatte & Trong‐Anh Trinh, 2024. "Does global warming worsen poverty and inequality? An updated review," Journal of Economic Surveys, Wiley Blackwell, vol. 38(5), pages 1873-1905, December.
    3. Joshua E. Cinner & Iain R. Caldwell & Lauric Thiault & John Ben & Julia L. Blanchard & Marta Coll & Amy Diedrich & Tyler D. Eddy & Jason D. Everett & Christian Folberth & Didier Gascuel & Jerome Guiet, 2022. "Potential impacts of climate change on agriculture and fisheries production in 72 tropical coastal communities," Nature Communications, Nature, vol. 13(1), pages 1-11, December.
    4. Marshall Burke & Kyle Emerick, 2016. "Adaptation to Climate Change: Evidence from US Agriculture," American Economic Journal: Economic Policy, American Economic Association, vol. 8(3), pages 106-140, August.
    5. Cattaneo, Cristina & Peri, Giovanni, 2016. "The migration response to increasing temperatures," Journal of Development Economics, Elsevier, vol. 122(C), pages 127-146.
    6. Olivier Deschênes & Enrico Moretti, 2009. "Extreme Weather Events, Mortality, and Migration," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 659-681, November.
    7. Hanan G. Jacoby & Mariano Rabassa & Emmanuel Skoufias, 2015. "Distributional Implications of Climate Change in Rural India: A General Equilibrium Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(4), pages 1135-1156.
    8. E. Somanathan & Rohini Somanathan & Anant Sudarshan & Meenu Tewari, 2021. "The Impact of Temperature on Productivity and Labor Supply: Evidence from Indian Manufacturing," Journal of Political Economy, University of Chicago Press, vol. 129(6), pages 1797-1827.
    9. Gilli, Martino & Calcaterra, Matteo & Emmerling, Johannes & Granella, Francesco, 2024. "Climate change impacts on the within-country income distributions," Journal of Environmental Economics and Management, Elsevier, vol. 127(C).
    10. Johannes Emmerling & Pietro Andreoni & Ioannis Charalampidis & Shouro Dasgupta & Francis Dennig & Simon Feindt & Dimitris Fragkiadakis & Panagiotis Fragkos & Shinichiro Fujimori & Martino Gilli & Caro, 2024. "A multi-model assessment of inequality and climate change," Post-Print hal-04728629, HAL.
    11. Chen, Shuai & Gong, Binlei, 2021. "Response and adaptation of agriculture to climate change: Evidence from China," Journal of Development Economics, Elsevier, vol. 148(C).
    12. Olivier Deschênes & Michael Greenstone, 2007. "The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather," American Economic Review, American Economic Association, vol. 97(1), pages 354-385, March.
    13. Paglialunga, Elena & Coveri, Andrea & Zanfei, Antonello, 2022. "Climate change and within-country inequality: New evidence from a global perspective," World Development, Elsevier, vol. 159(C).
    14. Marshall Burke & Solomon M. Hsiang & Edward Miguel, 2015. "Climate and Conflict," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 577-617, August.
    15. Edward B. Barbier & Jacob P. Hochard, 2018. "Land degradation and poverty," Nature Sustainability, Nature, vol. 1(11), pages 623-631, November.
    16. Joshua Graff Zivin & Solomon M. Hsiang & Matthew Neidell, 2018. "Temperature and Human Capital in the Short and Long Run," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(1), pages 77-105.
    17. Mark Budolfson & Francis Dennig & Frank Errickson & Simon Feindt & Maddalena Ferranna & Marc Fleurbaey & David Klenert & Ulrike Kornek & Kevin Kuruc & Aurélie Méjean & Wei Peng & Noah Scovronick & Dea, 2021. "Climate action with revenue recycling has benefits for poverty, inequality and well-being," Nature Climate Change, Nature, vol. 11(12), pages 1111-1116, December.
    18. Heilmann, Kilian & Kahn, Matthew E. & Tang, Cheng Keat, 2021. "The urban crime and heat gradient in high and low poverty areas," Journal of Public Economics, Elsevier, vol. 197(C).
    19. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2012. "Temperature Shocks and Economic Growth: Evidence from the Last Half Century," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 66-95, July.
    20. Olivier Deschênes & Michael Greenstone, 2011. "Climate Change, Mortality, and Adaptation: Evidence from Annual Fluctuations in Weather in the US," American Economic Journal: Applied Economics, American Economic Association, vol. 3(4), pages 152-185, October.
    21. Maximilian Kotz & Anders Levermann & Leonie Wenz, 2022. "The effect of rainfall changes on economic production," Nature, Nature, vol. 601(7892), pages 223-227, January.
    22. Graff Zivin, Joshua & Song, Yingquan & Tang, Qu & Zhang, Peng, 2020. "Temperature and high-stakes cognitive performance: Evidence from the national college entrance examination in China," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    23. Cook, Nikolai & Heyes, Anthony, 2020. "Brain freeze: outdoor cold and indoor cognitive performance," Journal of Environmental Economics and Management, Elsevier, vol. 101(C).
    24. Ariel Ortiz-Bobea & Toby R. Ault & Carlos M. Carrillo & Robert G. Chambers & David B. Lobell, 2021. "Anthropogenic climate change has slowed global agricultural productivity growth," Nature Climate Change, Nature, vol. 11(4), pages 306-312, April.
    25. Solomon Hsiang & Paulina Oliva & Reed Walker, 2019. "The Distribution of Environmental Damages," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 13(1), pages 83-103.
    26. Kalkuhl, Matthias & Wenz, Leonie, 2020. "The impact of climate conditions on economic production. Evidence from a global panel of regions," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    27. Barreca, Alan I., 2012. "Climate change, humidity, and mortality in the United States," Journal of Environmental Economics and Management, Elsevier, vol. 63(1), pages 19-34.
    28. Marshall Burke & Solomon M. Hsiang & Edward Miguel, 2015. "Global non-linear effect of temperature on economic production," Nature, Nature, vol. 527(7577), pages 235-239, November.
    29. Johannes Emmerling & Pietro Andreoni & Ioannis Charalampidis & Shouro Dasgupta & Francis Dennig & Simon Feindt & Dimitris Fragkiadakis & Panagiotis Fragkos & Shinichiro Fujimori & Martino Gilli & Caro, 2024. "A multi-model assessment of inequality and climate change," Nature Climate Change, Nature, vol. 14(12), pages 1254-1260, December.
    30. Damania, R. & Desbureaux, S. & Zaveri, E., 2020. "Does rainfall matter for economic growth? Evidence from global sub-national data (1990–2014)," Journal of Environmental Economics and Management, Elsevier, vol. 102(C).
    31. Minh C. Nguyen & Judy Yang & Hai-Anh Dang & Carlos Sabatino, 2023. "On the construction of the World Bank’s Subnational Poverty and Inequality Databases: Documentation," Global Poverty Monitoring Technical Note Series 31, The World Bank.
    32. Daniel Oudin Åström & Bertil Forsberg & Kristie L. Ebi & Joacim Rocklöv, 2013. "Attributing mortality from extreme temperatures to climate change in Stockholm, Sweden," Nature Climate Change, Nature, vol. 3(12), pages 1050-1054, December.
    33. Burke, Marshall & Hsiang, Solomon M & Miguel, Edward, 2015. "Global non-linear effect of temperature on economic production," Department of Economics, Working Paper Series qt3g72r0zv, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    34. Anouch Missirian & Wolfram Schlenker, 2017. "Asylum applications respond to temperature fluctuations," Post-Print hal-04136700, HAL.
    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. Swapnanil SenGupta & Aakansha Atal, 2024. "Income inequality in the face of climate change: an empirical investigation on unequal nations, vulnerable regions and India," SN Business & Economics, Springer, vol. 4(8), pages 1-33, August.
    2. Pardy, Martina & Riom, Capucine & Hoffmann, Roman, 2024. "Climate impacts on material wealth inequality: global evidence from a subnational dataset," LSE Research Online Documents on Economics 125447, London School of Economics and Political Science, LSE Library.

    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. Hai‐Anh H. Dang & Stephane Hallegatte & Trong‐Anh Trinh, 2024. "Does global warming worsen poverty and inequality? An updated review," Journal of Economic Surveys, Wiley Blackwell, vol. 38(5), pages 1873-1905, December.
    2. Meierrieks, Daniel & Stadelmann, David, 2024. "Is temperature adversely related to economic development? Evidence on the short-run and the long-run links from sub-national data," Energy Economics, Elsevier, vol. 136(C).
    3. Gilli, Martino & Calcaterra, Matteo & Emmerling, Johannes & Granella, Francesco, 2024. "Climate change impacts on the within-country income distributions," Journal of Environmental Economics and Management, Elsevier, vol. 127(C).
    4. Xiaojun Yu & Russell Smyth & Yao Yao & Quanda Zhang, 2024. "Water stress and industrial firm productivity: Evidence from China," Monash Economics Working Papers 2024-20, Monash University, Department of Economics.
    5. Cosaert, Sam & Nieto Castro, Adrian & Tatsiramos, Konstantinos, 2023. "Temperature and the Timing of Work," IZA Discussion Papers 16480, Institute of Labor Economics (IZA).
    6. Feriga,Moustafa Amgad Moustafa Ahmed Moustafa & Lozano Gracia,Nancy & Serneels,Pieter Maria, 2024. "The Impact of Climate Change on Work : Lessons for Developing Countries," Policy Research Working Paper Series 10682, The World Bank.
    7. Desbordes, Rodolphe & Eberhardt, Markus, 2024. "Climate change and economic prosperity: Evidence from a flexible damage function," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    8. Acevedo, Sebastian & Mrkaic, Mico & Novta, Natalija & Pugacheva, Evgenia & Topalova, Petia, 2020. "The Effects of Weather Shocks on Economic Activity: What are the Channels of Impact?," Journal of Macroeconomics, Elsevier, vol. 65(C).
    9. Sam Cosaert & Adrián Nieto & Konstantinos Tatsiramos, 2023. "Temperature and Joint Time Use," CESifo Working Paper Series 10464, CESifo.
    10. Chen, Fanglin & Zhang, Jie & Chen, Zhongfei, 2024. "Assessment of the effects of extreme temperature on economic activity," Ecological Economics, Elsevier, vol. 222(C).
    11. Moustafa Feriga & Mancy Lozano Gracia & Pieter Serneels, 2024. "The impact of climate change on work lessons for developing countries," CSAE Working Paper Series 2024-02, Centre for the Study of African Economies, University of Oxford.
    12. Hajdu, Tamás, 2024. "Temperature exposure and sleep duration: Evidence from time use surveys," Economics & Human Biology, Elsevier, vol. 54(C).
    13. Philippe Kabore & Nicholas Rivers, 2023. "Manufacturing output and extreme temperature: Evidence from Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(1), pages 191-224, February.
    14. Lehr, Jakob & Rehdanz, Katrin, 2024. "The effect of temperature on energy related CO2 emissions and economic performance in German industry," Energy Economics, Elsevier, vol. 138(C).
    15. Cui, Xiaomeng & Gafarov, Bulat & Ghanem, Dalia & Kuffner, Todd, 2024. "On model selection criteria for climate change impact studies," Journal of Econometrics, Elsevier, vol. 239(1).
    16. Picchio, Matteo & van Ours, Jan C., 2024. "The impact of high temperatures on performance in work-related activities," Labour Economics, Elsevier, vol. 87(C).
    17. Linsenmeier, Manuel, 2021. "Temperature variability and long-run economic development," LSE Research Online Documents on Economics 110499, London School of Economics and Political Science, LSE Library.
    18. Ouyang, Yanyan & Wang, Shengquan & Weng, Dabin & Zhang, Wenhao, 2024. "Temperature and domestic trade: City evidence from China," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 130-149.
    19. Cuong Viet Nguyen & Manh‐Hung Nguyen & Toan Truong Nguyen, 2023. "The impact of cold waves and heat waves on mortality: Evidence from a lower middle‐income country," Health Economics, John Wiley & Sons, Ltd., vol. 32(6), pages 1220-1243, June.
    20. Jimmy Karlsson, 2021. "Temperature and Exports: Evidence from the United States," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 80(2), pages 311-337, October.

    More about this item

    Keywords

    climate change; temperature; poverty; inequality; subnational data;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ehl:lserod:120156. 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: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.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.