The Distributional Effects of Climate Change: Evidence from Iran

38 Pages Posted: 22 Mar 2021 Last revised: 14 May 2021

See all articles by Naser Amanzadeh

Naser Amanzadeh

Khatam University - Tehran Institute for Advanced Studies

Toshi H. Arimura

Waseda University - School of Political Science and Economics

Mohammad Vesal

Sharif University of Technology; Economic Research Forum

Seyed Farshad Fatemi Ardestami

affiliation not provided to SSRN

Date Written: May 14, 2021

Abstract

Climate change has heterogeneous effects on poor and wealthy households due to differences in vulnerabilities and exposure. However, few papers provide estimates on the magnitude of climate impacts across the income distribution. In this paper, we combine 21 rounds of household expenditure and income surveys from Iran for the period from 1998 to 2018 to construct a large sample of rural and urban households. Using within-district variation in temperature, we show that a one-degree Celsius increase in annual temperature leads to 8.1 and 4.7 percent decreases in rural and urban per capita expenditures, respectively. We find that the impact is twice the average effect for the poorest decile. Furthermore, we provide evidence that available household resources that determine vulnerabilities play a more important role than the difference in exposure to climate change. Our findings suggest that compensatory policies should target the poorest households, as poverty is a stronger determinant of impact than being an agricultural worker or residing in already hot areas.

Keywords: Climate Change, Expenditure Distribution, Vulnerability, Poverty

JEL Classification: Q51, Q54, Q12, I32, D31

Suggested Citation

Amanzadeh, Naser and Arimura, Toshihide H. and Vesal, Mohammad and Fatemi Ardestami, Seyed Farshad, The Distributional Effects of Climate Change: Evidence from Iran (May 14, 2021). Available at SSRN: https://ssrn.com/abstract=3795067 or http://dx.doi.org/10.2139/ssrn.3795067

Naser Amanzadeh (Contact Author)

Khatam University - Tehran Institute for Advanced Studies ( email )

Iran

Toshihide H. Arimura

Waseda University - School of Political Science and Economics ( email )

1-6-1 Nishi-Waseda
Shinjuku-ku, Tokyo 169-8050, Tokyo 169-8050
Japan

Mohammad Vesal

Sharif University of Technology ( email )

Graduate School of Management and Economics
Azadi Ave.
Tehran, Tehran 1458889694
Iran

HOME PAGE: http://gsme.sharif.edu/~vesal

Economic Research Forum ( email )

Cairo
Egypt

Seyed Farshad Fatemi Ardestami

affiliation not provided to SSRN

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