Estimating the Consequences of Climate Change from Variation in Weather
Department of Economics
University of Arizona
Friday, May 3, 2019
Taylor-Hibbard Seminar Room (Rm103)
12:00 pm-1:15 pm
I formally relate the consequences of climate change to the time series variation in weather extensively explored by recent empirical literature. I show that xed eects estimators can exactly recover the eects of climate only when agents' payo functions are in one of two classes. In other cases, xed eects estimators can only bound the eects of climate, with the direction of the bound determined by how past actions aect the marginal benet of current actions. Empirical work should begin controlling for forecasts in order to both expand and test the conditions under which it can recover the eects of climate.