ATTN GOLDWATER: According to economics, cold climates > hot climates

[traininthedistance]

http://www.vox.com/2015/2/16/8046031/extreme-cold-extreme-heat

'Fraid my climate preferences have been PROVEN to be superior to yours, with SCIENTIFICAL ECONOMICS.

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[Antonio the Sixth]

I'm gonna assume it's another idiot who ran a regression and forgot about all the interpretative precautions they teach you at Quantitative Methods 101.

[Hatman 🍁]

This is obvious. Colder places tend to have better systems of government, more social welfare and better economies.

If it's warm out all the time, people tend to want to party all the time. There's less incentive to want to work hard. It's also easier to be homeless when it's warm out. But also, it's harder to ignore homelessness when it's really cold out.

[RFayette]

Except plenty of rich Northern countries have wealthy enclaves in tropical zones, such as Hawaii, Curacao, and Aruba, just to name a few.

[Hatman 🍁]

Except plenty of rich Northern countries have wealthy enclaves in tropical zones, such as Hawaii, Curacao, and Aruba, just to name a few.

There are a lot of exceptions, but there is an obvious trend. And, once people get really wealthy, they're going to want to find somewhere warmer to live. The wealthy people in those enclaves are almost entirely non natives.

[Simfan34]

Sweden is wealthier than the Congo! Shocking revelation!

[Snowstalker Mk. II]

vox pls

[Gustaf]

There is an interesting argument on how different types of crops drove different institutions.

[DC Al Fine]

I'm gonna assume it's another idiot who ran a regression and forgot about all the interpretative precautions they teach you at Quantitative Methods 101.

Read the article. You are correct.

[Foucaulf]

This is obvious. Colder places tend to have better systems of government, more social welfare and better economies.

If it's warm out all the time, people tend to want to party all the time. There's less incentive to want to work hard. It's also easier to be homeless when it's warm out. But also, it's harder to ignore homelessness when it's really cold out.

I'm going to assume this is facetious and just link to the paper. It's a pretty standard applied micro paper, identifying the impact of temperature changes on incomes in US counties. Their main trick is that they can use a fixed effects model with relative confidence, since temperature exogenously fluctuate over the year.

Matt Yglesias, as is befitting a humanities person, extrapolates this result too much to development and growth. (let's keep in mind the most substantial effects in this paper is still 1.5%) The paper's original motivation is global warming; a common debate (and my view too) is that global warming won't really affect the U.S. much, since it has the technology and the internal market to adapt quickly. What they claim is that hot weather just saps people's productivity, dragging out production and lagging the U.S. economy. The same is true of cold weather as well, though that's a secondary concern of the authors.

Look at Figures 1 & 2 instead of the one linked in the article (which is a robustness check). Of course, with these regressions using local data there's always a risk of overstatement, because factors are mobile and can adjust between counties. But, if you buy the theory that temperature saps the productivity of those gainfully employed, this is less of a problem.

[Foucaulf]

Double post, but this is an interesting comment:

Even if you take these findings for granted, you can spin them in the opposite direction with an easy and obvious explanation rooted in the substitution effect: People in the United States have better, more numerous, and cheaper leisure options on hot days than they do on cold days. Hot days are better than cold days!

Since the dependent variable is income and not welfare, the utility of leisure isn't what's going on here. But this paper isn't a quasi-experimental one either. Here's what I think is a plausible explanation for the variation: workers are only allotted a small, finite number of sick leave or vacation days, and everyone prefers to cash them out during the summer. What happens is that they work for excessively long periods without extra breaks from fall to winter, which hurts their productivity. When summer comes, they all leave work or work very haphazardly, and the firm's operations get stalled.

But then the policy prescription is not a "freak out about climate change" one as it is "make the labour market more flexible".