Measuring Climatic Impacts on Energy Expenditures:
A Review of the Empirical Literature
Maximilian Auffhammer and Erin T. Mansur
Energy Economics, forthcoming.
Working Paper, April 2014.
This paper reviews the literature on the relationship between climate and the energy sector. In particular, we primarily discuss empirical papers published in peer-reviewed economics journals focusing on how climate affects energy expenditures. Climate will affect energy consumption by changing how consumers respond to short run weather shocks (the intensive margin) as well has how people will adapt in the long run (the extensive margins). Along the intensive margin, further research that uses household-level panel data of energy consumption may help identify how consumers around the world respond to weather shocks. Research on technology adoption, like air conditioning use, will further our understanding of the extensive margin.
JEL Codes: Q41, Q54