Energy and temperature are substitutes in the production of health

This week in AEJ Applied:

Climate Change, Mortality, and Adaptation: Evidence from Annual Fluctuations in Weather in the US 
Olivier DeschĂȘnes and Michael Greenstone

Abstract: Using random year-to-year variation in temperature, we document the relationship between daily temperatures and annual mortality rates and daily temperatures and annual residential energy consumption. Both relationships exhibit nonlinearities, with significant increases at the extremes of the temperature distribution. The application of these results to "business as usual" climate predictions indicates that by the end of the century climate change will lead to increases of 3 percent in the age-adjusted mortality rate and 11 percent in annual residential energy consumption. These estimates likely overstate the long-run costs, because climate change will unfold gradually allowing individuals to engage in a wider set of adaptations.

More on temperature's substitutes/compliments here and here.

(h/t Michael O)

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