Working Paper: NBER ID: w25785
Authors: Ingvild Alms; Maximilian Auffhammer; Tessa Bold; Ian Bolliger; Aluma Dembo; Solomon M. Hsiang; Shuhei Kitamura; Edward Miguel; Robert Pickmans
Abstract: Accumulating evidence indicates that environmental temperature substantially affects economic outcomes and violence, but the reasons for this linkage are only partially understood. While factors external to human beings (such as agricultural production) are known to respond adversely to high temperatures, extreme temperatures could also directly influence the internal mental processes governing decision-making. We study this by systematically evaluating the effect of thermal stress on multiple dimensions of economic decision-making, judgment, and destructive behavior with 2,000 participants in Kenya and the US who were randomly assigned to different temperatures in a laboratory. We find that heat significantly affects individuals’ willingness to voluntarily destroy other participants’ assets, with pronounced increases among those experiencing heightened political conflict in Kenya. We find that other major dimensions of economic decision making are largely unaffected by temperature.
Keywords: thermal stress; economic decision-making; destructive behavior; climate change; randomized controlled trial
JEL Codes: C91; D74; O1; Q50
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| thermal stress (J81) | economic decision-making outcomes (other dimensions) (D91) |
| thermal stress (J81) | destructive behavior (D91) |
| high temperatures (L94) | willingness to destroy others' assets (P26) |
| high temperatures (L94) | increased violence (D74) |
| heat (Y60) | destructive behavior (politically marginalized ethnic groups) (J15) |
| high temperatures (California) (Q54) | decrease in destructive behavior (D91) |