The Amenity Value of Climate to Households in Germany

Posted: 10 Dec 2008

See all articles by Katrin Rehdanz

Katrin Rehdanz

University of Kiel; University of Hamburg - Centre for Marine and Climate Research (ZMK); Kiel Institute for the World Economy

David J. Maddison

University College London - Department of Economics

Abstract

Despite the importance of as comprehensive as possible damage cost estimates to cost benefit analyses of global attempts to reduce greenhouse gas emissions, few researchers have attempted to monetize the direct impact of climate change on households. This study uses the hedonic technique to measure the amenity value of the climate to German households. Evidence suggests that the amenity value of climate variables is capitalized mainly into hedonic house price differentials. Overall, German households appear to prefer warmer winters with less rainfall. Combining estimates of amenity values with the predicted changes in climate associated with the IPCC's A2 emissions scenario we find that the overall impact of climate change on German households, whilst negative, is typically not statistically different from zero. This occurs in part because the prediction is for warmer but wetter winters and also because the amenity value of some climate variables cannot be measured with sufficient precision.

JEL Classification: Q29, R29

Suggested Citation

Rehdanz, Katrin and Maddison, David J., The Amenity Value of Climate to Households in Germany. Oxford Economic Papers, Vol. 61, No. 1, pp. 150-167, 2009. Available at SSRN: https://ssrn.com/abstract=1311719 or http://dx.doi.org/gpn028

Katrin Rehdanz (Contact Author)

University of Kiel ( email )

Olshausenstr. 40
D-24118 Kiel, Schleswig-Holstein 24118
Germany

University of Hamburg - Centre for Marine and Climate Research (ZMK) ( email )

Troplowitzstrasse 7
D-22529 Hamburg
Germany

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, D-24100
Germany

David J. Maddison

University College London - Department of Economics ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

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