Warming Temperature and the Role of Environmental Policy in Protecting the U.S. Quality of Life

Abstract

We document a negative relation between abnormal temperature and quality of life in the U.S. since 1990. Cross-state and (within state-year) county-level comparisons both indicate that the temperature-quality of life relation is more positive in states adopting more stringent environmental policies prior to our sample period. Additional tests indicate no significant pre-adoption differences in the temperature-income sensitivity of adopters and non-adopters. Together, our findings suggest that U.S. quality of life is likely to deteriorate on average if rising temperature projections manifest and that enhancing current environmental policies should be added to the list of potential avenues of adaption.

Keywords: temperature shocks, climate change, quality of life, state regulations, environmental policy

JEL Classification: G24, G28, E24, H31, H74, J15, O15, R23