September 19, 2019
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Study finds cold weather better for economic activity

Gabor Degre | BDN
Gabor Degre | BDN
Swimmers enjoy the water at Lake Wassookeag in Dexter in August 2009.

PORTLAND, Maine — Sit back and imagine it’s 61 degrees out. Now, what’s the first thing you think of doing?

A working paper from the National Bureau of Economic Research suggests that you’re thinking — perhaps subconsciously — of reducing your work productivity.

As wind chills hit as low as 35 below in parts of Maine, that’s understandable.

The study is part of the research bureau’s series of working papers and has not been peer-reviewed or scrutinized by its board, but aims to tackle the question of what effect the environment has on economic output.

The study argues that temperature “continues to play a large role in overall economic performance,” concluding that productivity for an individual day declines by about 1.7 percent for every rise in temperature of about 1.8 degrees.

The study estimated a weekday of more than 86 degrees costs the average county $20 per person in income.

Glenn Mills, chief economist for the Maine Department of Labor’s Center for Workforce Research and Information, said in an email Tuesday that he is skeptical of the study’s ability to account for other variables.

“On average, productivity is likely higher in the North (where there are fewer hot days) than the South because the region has a higher share of manufacturing, finance and other high productivity sectors,” Mills said.

The study said it drew conclusions about weather effects on productivity by comparing productivity in years with unusually high or low temperatures across the same counties.

In general, the study found cold weather did not have as significant an effect on economic output as hot weather. The study was written by assistant professors Tatyana Deryugina at the University of Illinois’ Urbana-Champlain campus and Solomon Hsiang at the Goldman School of Public Policy at the University of California’s Berkeley campus.

The researchers’ question was posed largely to estimate what the effect would be, if any, of climate change on economic output, analyzing the effect of daily temperature on annual income by U.S. county over 40 years.

Using estimates of global climate change for the years 2080-99, the study concluded higher daily temperatures stand to affect annual economic growth, lowering it by about 0.06 to 0.16 percent in the United States, “unless populations engage in new forms of adaptation.”

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