Please use this identifier to cite or link to this item:
Longitudinal Study: HILDA
Title: Temperature Shocks and Household Savings
Authors: Churchill, Sefa Awaworyi
Smyth, Russell
Trinh, Trong-Anh
Yew, Siew Ling
Institution: Melbourne Institute of Applied Economic and Social Research
Publication Date: Mar-2022
Keywords: temperature
net worth
wealth accumulation
Abstract: We present the first study to examine the impact of temperature shocks on household savings behaviour. We first develop a theoretical model to examine the relationship between average temperature and savings via risk and time preferences. The model predicts an ambiguous effect of both risk and time preferences as channels. We test the theoretical predictions using longitudinal data from the Household, Income and Labour Dynamics in Australia Survey and satellite re-analysis temperature data. We find that a standard deviation increase in average temperature is associated with a 4.3% increase in net worth and a 12.8% increase in savings. We examine risk preferences and time preferences as channels and find that time preferences mediate the relationship between temperature shocks and savings.
Research collection: Reports and technical papers
Appears in Collections:Technical Papers

Show full item record

Page view(s)

checked on Sep 25, 2023
Google icon

Google ScholarTM


Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.