The Amenity Value of Climate to German Households

This study uses the hedonic approach to measure the amenity value of climate in Germany. Unlike in earlier research separate hedonic wage and house price regressions are estimated for relatively small geographic areas and formal tests undertaken to determine whether the coefficients describing the impact of climate variables are homogenous across these areas. Evidence suggests that German households are compensated for climate amenities mainly through hedonic housing markets. Given that climate is largely unproductive to industry and few industries spend more on land than labour this is consistent with what theory would predict. Throughout Germany house prices are higher in areas with higher January temperatures, lower July temperatures and lower January precipitation. In East Germany wages are higher in areas with higher January precipitation. The full implicit price of climate variables however is very uncertain.Climate change, Germany, Hedonic pricing

The Amenity Value of Climate to German Households

This study uses the hedonic approach to measure the amenity value of climate in Germany. Unlike in earlier research separate hedonic wage and house price regressions are estimated for relatively small geographic areas and formal tests undertaken to determine whether the coefficients describing the impact of climate variables are homogenous across these areas. Evidence suggests that German households are compensated for climate amenities mainly through hedonic housing markets. Given that climate is largely unproductive to industry and few industries spend more on land than labour this is consistent with what theory would predict. Throughout Germany house prices are higher in areas with higher January temperatures, lower July temperatures and lower January precipitation. In East Germany wages are higher in areas with higher January precipitation. The full implicit price of climate variables however is very uncertain.Climate change; Germany; Hedonic pricing

Are Regional Differences in Utility Eliminated over Time?: Evidence from Germany

Hedonic theory assumes that changes in land prices and wage rates eliminate the utility advantages of differing locations. Using happiness data from the German socio-economic panel this paper empirically tests whether regional utility differences exist and if so whether utility levels show any tendency to converge over time. Empirical analysis reveals substantial differences in utility over different regions of Germany. Analysing a panel of data indicates that even if individual utility levels are at any one moment in disequilibrium they are rapidly converging over Germany for all types of individuals.Convergence, Hedonic Analysis, Happiness, Migration, Germany

Carbon Emissions and Economic Growth: Homogeneous Causality in Heterogeneous Panels

This paper introduces the concept of homogeneous non-causality in heterogeneous panels. This concept is used to examine a panel of data for evidence of a causal relationship between GDP and carbon emissions. The technique is compared to the standard test for homogeneous non-causality in homogeneous panels and heterogeneous non-causality in heterogeneous panels. In North America, Asia and Oceania the homogeneous non-causality hypothesis that CO2 emissions does not Granger cause GDP cannot be rejected if heterogeneity is allowed for in the data-generating process. In North America the homogeneous non-causality hypothesis that GDP does not cause CO2 emissions cannot be rejected either.Energy; Carbon Emissions; Granger Causality; Heterogeneous Panels

Climate and Happiness

Climate is an important input to many human activities. Climate affects heating and cooling requirements, determines clothing and nutritional needs and limits recreational activities. As such it is to be expected that individuals will have a preference for particular types of climate. These preferences have indeed been observed using a variety of approaches including regional analyses of wage rates and land prices, the propensity to migrate, and analyses based on household consumption patterns. Mindful of existing research this paper analyses a panel of 67 countries attempting to explain differences in self-reported levels of happiness by reference to amongst other things temperature and precipitation. Various indices are used for each of these variables including means, extremes and number of months with a particular climate like the number of hot and cold months. Using a panel-corrected least squares approach the paper demonstrates that, even when controlling for a range of other factors, climate variables have a particularly powerful effect on self reported levels of happiness. Furthermore there is a correspondence between the findings that emerge from this analysis and earlier studies with respect to what constitutes a preferred climate. The relationship between climate and self reported happiness is of particular interest because of the much discussed threat of anthropogenically induced climate change. Differential patterns of warming along with a changed distribution of rainfall promises to alter dramatically the distribution of happiness between nations with some countries moving towards a preferred climate and others moving further away. We find that higher mean temperatures in the coldest month increase happiness, whereas higher mean temperatures in the hottest month decrease happiness. Precipitation does not significantly affect happiness. In particular high latitude countries included in our dataset might benefit from temperature changes. Countries already characterized by very high summer temperatures would most likely suffer losses from climate change.amenity value, climate change, happiness, well-being

HAPPINESS OVER SPACE AND TIME

Hedonic theory assumes that changes in land prices and wage rates eliminate the utility advantages of differing locations. Using happiness data from the German socio-economic panel this paper empirically tests whether regional utility differences exist and if so whether utility levels show any tendency to converge over time. Empirical analysis reveals substantial differences in utility over different regions of Germany. Analysing a panel of data indicates that even if individual utility levels are at any one moment in disequilibrium they are rapidly converging over Germany for all types of individuals.amenity value, Happiness

THE AMENITY VALUE OF CLIMATE TO HOUSEHOLDS IN GERMANY

This study uses the hedonic approach to measure the amenity value of climate in Germany. Unlike in earlier research separate hedonic wage rate and house price regressions are estimated for relatively small geographic areas and formal tests undertaken to determine whether the coefficients describing the impact of climate variables are homogenous over these areas. The evidence suggests that households in Germany are compensated for climate amenities mainly through hedonic housing markets. Given that climate is largely unproductive to industry and few industries spend more on land than labor this is consistent with what theory would predict. Overall households regard higher January temperatures as an amenity but higher July temperatures as a disamenity.amenity value, Climate Change, Germany, Hedonic Pricing

Local Environmental Quality and Life-Satisfaction in Germany

Hitherto the task of valuing differences in environmental quality arising from air pollution and noise nuisance has been carried out mainly by using the hedonic price technique. This paper proposes a different approach to deriving information on individual preferences for local environmental quality. It analyses data drawn from the German socio economic panel in an attempt to explain differences in self-reported levels of well-being in terms of environmental quality. Mindful of existing research a large number of other explanatory variables are included to control for socio-demographic differences, economic circumstances as well as neighbourhood characteristics. Differences in local air quality and noise levels are measured by how much an individual feels affected by air pollution or noise exposure in their residential area. The evidence suggests that even when controlling for a range of other factors higher local air pollution and noise levels significantly diminish subjective well-being. But interestingly differences in perceived air and noise pollution are not capitalised into differences in house prices.air pollution, environmental quality, Germany, life-satisfaction, noise exposure, well-being

The impact of climate change on African agriculture : a ricardian approach

This paper uses the Ricardian approach to examine how farmers in 11 countries in Africa have adapted to existing climatic conditions. It then estimates the effects of predicted changes in climate while accounting for whatever farmer adaptation might occur. This study differs from earlier ones by using farmers'own perceptions of the value of their land. Previous research, by contrast, has relied on either observed sale prices or net revenues, sometimes aggregated over geographically large tracts of terrain. The study also makes use of high resolution data describing soil quality and runoff.Furthermore, it tackles the challenges involved in modeling the effect of climate on agriculture in a study that includes countries in the northern and southern hemispheres, as well as the tropics. The study confirms that African agriculture is particularly vulnerable to climate change. Even with perfect adaptation, regional climate change by 2050 is predicted to entail production losses of 19.9 percent for Burkina Faso and 30.5 percent for Niger. By contrast, countries such as Ethiopia and South Africa are hardly affected at all, suffering productivity losses of only 1.3 percent and 3 percent, respectively. The study also confirms the importance of water supplies as measured by runoff, which, being affected by both temperature and precipitation, may itself be highly sensitive to climate change.Environmental Economics&Policies,Climate Change,Common Property Resource Development,Rural Development Knowledge&Information Systems,Global Environment Facility

The perception of and adaptation to climate change in Africa

The objective of this paper is to determine the ability of farmers in Africa to detect climate change, and to ascertain how they have adapted to whatever climate change they believe has occurred. The paper also asks farmers whether they perceive any barriers to adaptation and attempts to determine the characteristics of those farmers who, despite claiming to have witnessed climate change, have not yet responded to it. The study is based on a large-scale survey of agriculturalists in 11 African countries. The survey reveals that significant numbers of farmers believe that temperatures have already increased and that precipitation has declined. Those with the greatest experience of farming are more likely to notice climate change. Further, neighboring farmers tell a consistent story. There are important differences in the propensity of farmers living in different locations to adapt and there may be institutional impediments to adaptation in some countries. Although large numbers of farmers perceive no barriers to adaptation, those that do perceive them tend to cite their poverty and inability to borrow. Few if any farmers mentioned lack of appropriate seed, security of tenure, or market accessibility as problems. Those farmers who perceive climate change but fail to respond may require particular incentives or assistance to do what is ultimately in their own best interests. Although experienced farmers are more likely to perceive climate change, it is educated farmers who are more likely to respond by making at least one adaptation.Climate Change,Rural Poverty Reduction,Environmental Economics&Policies,Agricultural Knowledge&Information Systems,Rural Development Knowledge&Information Systems