The price of climate : revealed preferences of French consumers

Abstract : By the hedonic price method we study consumers' preferences for climate (temperature, very hot or cold days, and rainfall) in France, a temperate country with varied climates. Data are, on the one hand, individual attributes and prices of houses and workers and, on the other hand, climate attributes interpolated from weather stations. We show that the French households put a positive value on warmer temperatures while very hot days are a nuisance. Such climatic amenities are attributes of consumers' utility function; nevertheless, global warming assessments by economists, such as Stern Review report (2006) ignore these climatic preferences. The social welfare assessment is changed when the direct consumption of climate is taken into account: from the estimated hedonic prices, we assess that the GDP rises by about 1 per cent when temperature rises of 1°C.
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Jean Cavailhès, Daniel Joly, Hervé Cardot, Mohamed Hilal, Pierre Wavresky, et al.. The price of climate : revealed preferences of French consumers. 5th Urban research Symposium, Cities and climate change : responding to an urgent agenda, Jun 2009, Marseille, France. pp.19. ⟨hal-00767207⟩

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