Household Location Decisions and the Value of Climate Amenities
The amenity value of climate - what people are willing to pay (WTP) to experience warmer winters or avoid hotter summers is an important component of the benefits of climate policies.​
We provide estimates of these non-market values across cities in the United States using different revealed preference methods and econometric models (Featured as a Research Highlight in Nature Climate Change).
What did we do?
We estimated a discrete choice model of household location decisions to infer the WTP for milder seasonal temperatures and applied the model to assess the welfare effects of temperature changes.
We contrasted results from a discrete location choice model with traditional hedonic models.
What did we find?
Households are WTP more for warmer winters and cooler summers, but the amount varies by climate region.
Discrete choice models can estimate preferences for climate by age group.
What are the implications?
The amenity value of climate could significantly add to market-based estimates of climate damages, even for moderate temperature increases. Estimating WTP by city is important because temperature changes vary across regions; using an average WTP would bias the estimated impacts.
Discrete choice models are more appropriate than hedonic models for estimating nationwide climate damages.