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Assessing the climate and weather effects in Brazil using panel data

Grant number: 18/02081-1
Support type:Scholarships abroad - Research
Effective date (Start): September 01, 2018
Effective date (End): June 01, 2019
Field of knowledge:Applied Social Sciences - Economics
Principal Investigator:Paula Carvalho Pereda
Grantee:Paula Carvalho Pereda
Host: Robert Mendelsohn
Home Institution: Faculdade de Economia, Administração e Contabilidade (FEA). Universidade de São Paulo (USP). São Paulo , SP, Brazil
Local de pesquisa : Yale University, United States  
Associated research grant:14/50848-9 - INCT 2014: INCT for Climate Change, AP.PFPMCG.TEM

Abstract

In Brazil, climate is expected to change in the next 40 years (increase in average temperature and decrease in average rainfall). The frequency of weather extremes is also expected to increase, changing the weather across different regions of the country. Thus, the estimation of the consequences of such changes is crucial to inform policymakers. In this research project, we propose a research agenda to be developed at Yale University under the supervision of Professor Robert Mendelsohn focused on the effects of climate and weather on economic outcomes. Mendelsohn (2017) shows that most inter-temporal panel studies studying the weather impacts on economic outcomes do not consider that those effects are nonlinear and might vary across climates. Therefore, our objective is to (i) apply the correction proposed by Mendelsohn (2017) to re-examine the results of studies -- using Brazilian data -- that have not considered such nonlinearity, (ii) estimate the inter-temporal weather effects on labor productivity in Brazil and compare the results with and without the correction, and (iii) discuss other research ideas with the Yale supervisor during the stay in the U.S..