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The Value of Climate Amenities: Evidence from Us Migration Decisions

53 Pages Posted: 2 Feb 2013  

Paramita Sinha

RTI International

Maureen Cropper

University of Maryland - Department of Economics; Resources for the Future

Multiple version iconThere are 2 versions of this paper

Date Written: February 2013

Abstract

We value climate amenities by estimating a discrete location choice model for households that changed metropolitan statistical areas (MSAs) between 1995 and 2000. The utility of each MSA depends on location-specific amenities, earnings opportunities, housing costs, and the cost of moving to the MSA from the household's 1995 location. We use the estimated trade-off between wages and climate amenities to value changes in mean winter and summer temperatures. At median temperatures for 1970 to 2000, a 1°F increase in winter temperature is worth less than a 1° decrease in summer temperature; however, the reverse is true at winter temperatures below 25°F. These results imply an average welfare loss of 2.7 percent of household income in 2020 to 2050 under the B1 (climate-friendly) scenario from the special report on emissions scenarios (Intergovernmental Panel on Climate Change 2000), although some cities in the Northeast and Midwest benefit. Under the A2 (more extreme) scenario, households in 25 of 26 cities suffer an average welfare loss equal to 5 percent of income.

Suggested Citation

Sinha, Paramita and Cropper, Maureen, The Value of Climate Amenities: Evidence from Us Migration Decisions (February 2013). NBER Working Paper No. w18756. Available at SSRN: https://ssrn.com/abstract=2210775

Paramita Sinha (Contact Author)

RTI International ( email )

PO Box 12194
Research Triangle Park, 27709
United States

Maureen L. Cropper

University of Maryland - Department of Economics

College Park, MD 20742
United States

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States

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