Climate Amenities, Climate Change, and American Quality of Life
David Albouy, Walter Graf, Ryan Kellogg, and Hendrik Wolff
The chemistry of the human body makes our health and comfort sensitive to climate.Every day, climate influences human activity, including diet, chores, recreation,and conversation. Geographically, climate impacts the desirability of differentlocations and the quality of life they offer; few seek to live in the freezing tundraor oppressively hot deserts. This paper estimates the dollar value American householdsplace on climate amenities, including sunshine, precipitation, humidity, and especiallytemperature. Valuing climate amenities not only helps us to understand how climateaffects welfare and where people live, but also helps to inform policy responses to climate changes.
Using a quality of life measure that is carefully constructed from local wage andhousing price differentials, the authors find that Americans favor an average dailytemperature of 65 degrees, tend to dislike marginal increases in heat more thanmarginal increases in cold, and care less about marginal changes in outdoor temperatureonce the temperature is sufficiently uncomfortable that they are unlikely to gooutside. These preferences vary by location, reflecting people's preferences for warmer or colder climates. Changes in climate amenities under business-as-usual climate change predictions imply annual welfare losses of 1 to 3 percent of incomeby 2100, holding technology and preferences constant.