The semester is in full swing at Berkeley, and with it has come an ugly heat wave. My second-floor-five-occupant office measured 91 F yesterday - at 4:30 PM. Now, maybe I've got a case of the placebo effect, but the only thing I can think of when I show up to work and step out of my beautifully air conditioned car into the blazing sunshine is the slew of temperature regressions that have been run over the last few years. They all basically look the same:
Stolen from Schlenker and Roberts (2009).
Insert your favorite variable where a decrease means something bad, and we basically have a result that looks like this - when it gets hot out, everything starts to do badly (for a look at some of the known knowns and known unknowns in the US, check out the American Climate Prospectus -- and the new book that just came out).
Though we don't have quite as much empirical evidence about labor productivity/supply as we have about maize in the US (hopefully this is rapidly changing thanks to some excellent grad students/fellow summer campers), what we do have looks similar to Wolfram and Mike's corn figures. We do worse when it's hot out.
According to brand new work from Benjamin Leard and Kevin Roth (ha, see, this week does sort of have a WWP, even if it's late...), we also get into more fatal car accidents - driven by pedestrian and cyclists! They write:
“We exploit random daily variation in weather to document the relationship of temperature, rainfall, and snowfall with traffic accidents and travel demand. Using information on 46.5 million accidents from the State Data System of police reported accidents for 20 states and travel demand for 207,455 households included in the National Household Transportation Survey, we find unanticipated effects of weather on accidents and their severity. Our estimates suggest that while warmer temperatures and reduced snowfall are associated with a moderate decline in non-fatal accidents, they are also associated with a significant increase in fatal accidents. This increase in fatalities is due to a robust positive relationship between fatalities and temperature. Half of the estimated effect of temperature on fatalities is due to changes in the exposure to pedestrians, bicyclists, and motorcyclists as temperatures increase. The application of these results to middle-of-the-road climate predictions suggests that weather patterns for the end of the century would lead to 603 additional fatalities per year. Between 2010-2099, the present value social cost of all types of accidents caused by climate change is $58 billion.”
It's hard to argue with the mounting body of empirical evidence, especially when I've just spent the afternoon melting and reading the same few paragraphs about trade with heterogeneous firms over and over again. (Or maybe the heat is just a good excuse.) Here's hoping that the heat dissipates soon!
A better blog post would have a thorough discussion of the value of AC, feedback loops, etc, etc, etc. But, you know, it's hot out, and I have more trade theory to read, so I'll leave it here.