Daily Tao – Good Economics for Hard Times (Abhijit V. Banerjee;Esther Duflo) – 6

The effect of hot weather on productivity is not limited to agriculture. People are less productive when it is hot, particularly if they have to work outside. For example, evidence from the United States suggests that at temperatures over 38ºC, labor supply in outdoor jobs drops by as much as one hour per day, compared to temperatures in the 24ºC–26ºC range. There are no statistically detectable effects in industries that are not exposed to climate (for example, nonmanufacturing indoor activities). Children have lower test scores at the end of particularly hot school years. These effects are absent where schools have air conditioning, so they affect poorer children the most. In India, few factories have air conditioning. In a garment factory in India, a study looked at how labor productivity varied with temperature. For temperatures below 27ºC–28ºC, temperature had a very small impact on efficiency. But for mean daily temperatures above this cut-off (about one quarter of production days), efficiency went down by 2 percent for every one degree Celsius increase in temperature. Putting everything together, across the entire world, a study finds that it being 1°C warmer in a given year reduces per capita income by 1.4 percent, but only in poor countries. And, of course, the consequences of a warmer climate are not limited to income. Numerous studies emphasize the danger of hot temperatures for health. In the United States, an additional day of extreme heat (exceeding 32ºC) relative to a moderately cool day (10ºC–15ºC) raises the annual age-adjusted mortality rate by about 0.11 percent. In India, the effect is twenty-five times larger.

With the recent hot weather (with temperatures rising above the threshold of 28ºC frequently), thought this would be an interesting excerpt to bring up. With the rise in average temperatures, the economically weaker regions would be the one who take the biggest brunt of the negative effects of hot weather, whether it be economically or health-wise.

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