Do Economic Impacts of Heat Waves Vary Across Climates? Evidence from Chinese Cities

Abstract

As heat waves increasingly become a major concern due to their diverse impacts on human beings and societies, there is a growing need for comprehensive research on their effects. This study addresses the knowledge gap in the economic impacts of heat waves across different climates and highlights the importance of climatic heterogeneity. By analyzing a sample of prefecture-level cities in China with diverse climatic conditions and employing rigorous econometric methodologies, this study quantifies the heterogeneous effects across five climate zones and estimate real GDP losses due to heat waves. Our work finds it evident that the negative impacts of heat waves are more pronounced in cold climates than warmer and arid ones. The results underscore the importance of considering climatic heterogeneity in decentralized analyses, as overlooking this factor can lead to substantial bias and inaccuracy in estimating the economic impacts of heat waves.

Keywords: Heat waves, Extreme Heat Events, Labor Productivity, Climatic Heterogeneity, Economic Losses