Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/45872
Authors: 
Maddison, David
Rehdanz, Katrin
Narita, Daiju
Year of Publication: 
2011
Series/Report no.: 
Kiel Working Paper 1693
Abstract: 
According to household production function theory households combine marketed goods and nonmarket environmental goods to produce service flows of direct value to the household. This readily explains why, as an input to household production activities, households might have preferences over the climate. Using techniques more frequently employed to account for differences in the demographic composition of households we use household production function theory to estimate climate equivalence scales using household expenditure data drawn from 51 Japanese cities over the period 2000-2009. Our results indicate that warmer temperatures result in a small but statistically highly significant reduction in the cost of living. Combining these estimates with climate change scenarios associated with the IPCC A2, A1B, and B1 emissions scenarios other things being equal points to a slight reduction in Japanese households' cost of living.
Subjects: 
Consumer Demand
Household Production Function
Climate
Japan
JEL: 
D12
D13
Q51
Q54
Document Type: 
Working Paper

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