Estimating the Consequences of Climate Change from Variation in Weather

36 Pages Posted: 17 Sep 2018

See all articles by Derek Lemoine

Derek Lemoine

University of Arizona - Department of Economics

Date Written: September 2018

Abstract

I formally relate the consequences of climate change to the time series variation in weather extensively explored by recent empirical literature. I show that reduced-form fixed effects estimators can recover the effects of climate if agents are myopic, if agents' payoff functions belong to a particular class, or if the actions agents take in each period do not depend on actions taken in previous periods. I also show how to recover structural estimates of climate change impacts from reduced-form weather regressions. Applying this new method, I find that an additional 2°C of global warming would reduce eastern U.S. agricultural profits by around 50% under the median estimates.

Suggested Citation

Lemoine, Derek, Estimating the Consequences of Climate Change from Variation in Weather (September 2018). NBER Working Paper No. w25008. Available at SSRN: https://ssrn.com/abstract=3246831

Derek Lemoine (Contact Author)

University of Arizona - Department of Economics ( email )

McClelland Hall
Tucson, AZ 85721-0108
United States

HOME PAGE: http://www.dereklemoine.com/

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