Adaptation to Weather Shocks and Household Beliefs on Climate: Evidence from California

40 Pages Posted: 26 Jul 2021

Date Written: May 1, 2021

Abstract

Using a difference in differences framework, I show that California households exposed to a severe heat wave are differentially more likely to adopt central air conditioning units than those less exposed, controlling for historical climate. Using these “induced adopters” to predict take-up, I show that induced adopters have a significant increase in their summer energy demand 3 years following the heat wave, with insignificant effects on their winter electricity demand. In addition, I present a theoretical framework where household belief-updating about the climate rationalizes household learning about the climate that cannot be explained by myopia or alternative channels.

JEL Classification: Q54, Q47, D83

Suggested Citation

Howden, Wesley, Adaptation to Weather Shocks and Household Beliefs on Climate: Evidence from California (May 1, 2021). Available at SSRN: https://ssrn.com/abstract=3892429 or http://dx.doi.org/10.2139/ssrn.3892429

Wesley Howden (Contact Author)

University of Arizona ( email )

1130 E Helen St
McClelland Hall 401-HH
Tucson, AZ 85721
United States
+1 520 621 2529 (Phone)

HOME PAGE: http://wesleyhowden.com

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