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New results on the influence of climate on the distribution of population and economic activity

Füssel, Hans-Martin (2009): New results on the influence of climate on the distribution of population and economic activity.

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Abstract

This paper applies G-Econ+, an updated version of the G-Econ database by Nordhaus, to analyze the influence of climatic and geographic factors on the geographic distribution of population and economic activity. I discuss options for improved treatment of several statistical problems associated with G-Econ, which are not addressed adequately in the original G-Econ analysis. Reanalysis of key results from the original G-Econ analysis corrects some surprising results therein. Extensive sensitivity analysis determines the robustness of the relationship between climatic factors and economic activity across alternative central estimators. Further analysis assesses revealed climatic preferences of population, the effects of climate parameters on different quantiles of economic variables, and synergies between temperature and precipitation. I find that population density has a much stronger influence on output density than output per capita. Furthermore, least developed countries are located in a climatic zone where all indicators of economic activity decline with increasing temperature.

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