Abstract
Countries that are located in and near the Tropics have lower levels of average income than those in more temperate climates. Research shows that aspects of geography such as climate and disease ecology can affect economic outcomes and standards of living. This chapter focuses in particular on the effects of climate as it pertains to temperature and rainfall. A study is conducted which finds evidence of a negative relationship between higher temperatures and average incomes across countries. It also finds that countries that have wider ranges of temperature extremes have higher incomes. Lastly, the evidence points to the importance of rainfall but the relationship between levels of precipitation and income is more complex.
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Notes
- 1.
This chapter is based on previously published material in Khawar (2016).
- 2.
Appendix A includes details on the data and empirics of the analysis.
- 3.
Detailed explanations regarding the calculations of these variables are contained in the appendix to Gallup et al. (1999). A word about GIS software and how it works in this context. Unlike aggregate measures of GDP per capita, GIS allows researchers to develop measures that are based on smaller geographical units at a greater resolution (for example a 5 minute by 5 minute grid). As a parallel, imagine a landscape photograph taken with a 2 mega pixel camera versus a 12 mega pixel one. The camera with the greater resolution will allow you to see much greater detail. The same is true with GIS mapping. The increased availability of data on global weather has led to an increase in the use of GIS software and data sets in investigating weather-related phenomena as evidenced by recent research in the area. GIS has the advantage of being potentially more accurate since it corresponds to the particular surface area being analysed instead of a countrywide average. This would be particularly helpful if one were to study differences in output and climate within a certain region or country, for instance, Brazil.
- 4.
The data set contains information on worldwide temperatures and precipitation for at least one location in each country throughout the world, whenever possible. For large countries the stations are selected to provide comprehensive geographical coverage. The data are presented as an annual average calculated over a record length ranging from 3 to 105 years, averaging about 30 years for most countries. The temperature data consists of values of average daily temperature in January, April, July and October, as well as extreme maximum and extreme minimum temperatures, all in Fahrenheit. The precipitation data consists of average precipitation in each month as well as an annual total, all in inches.
- 5.
Dell et al. 2014.
- 6.
Appendix A includes details on how these values were computed and a listing of the values of these variables for each country in the study.
- 7.
Consult Appendix A for details on the empirical results of the study.
- 8.
An exception is countries in North Africa where colder temperatures in the desert at night might account for the wide range found and countries like Pakistan where high altitude in the northern mountainous area could account for the same.
- 9.
This may explain why average temperature now loses significance, again due to multi-collinearity.
- 10.
This is less far-fetched than it might seem. Even an inch of rain in Karachi causes roads to flood as sewers overflow and the entire city almost grinds to a halt. When I attended school in Karachi, we would routinely arrive at the school gates only to be waved back by the chawkidaar (gate keeper) who turned us around to return home as our school and most others in the city had to close due to the roads being almost impossible to navigate and the grounds being flooded. If an inch of rain could have this effect, imagine the havoc wrought by the more torrential monsoon rains.
- 11.
Kamarck 1976, 15–16.
- 12.
This result is robust even when a control for malaria, a measure of the malaria index in 1966 that was highly significant and important in the Gallup et al. (1999) study, is included.
- 13.
Masters and McMillan 2001.
- 14.
Rivoli 2014.
Bibliography
Dell, Melissa, Benjamin F. Jones, and Benjamin A. Olken. “What do we learn from the weather? The new climate–economy literature.” Journal of Economic Literature 52, no. 3 (2014): 740–798.
Gallup, John Luke, Jeffrey D. Sachs, and Andrew D. Mellinger. “Geography and economic development.” International Regional Science Review 22, no. 2 (1999): 179–232.
Kamarck, Andrew M. The tropics and economic development: A provocative inquiry into the poverty of nations. Baltimore: Johns Hopkins University Press, 1976.
Khawar, Mariam. “The impact of culture on economic growth and development.” International Advances in Economic Research 22, no. 2 (2016): 245–246.
Masters, William A., and Margaret S. McMillan. “Climate and scale in economic growth.” Journal of Economic Growth 6, no. 3 (2001): 167–186.
Rivoli, Pietra. The travels of a t-shirt in the global economy: An economist examines the markets, power, and politics of world trade. New preface and epilogue with updates on economic issues and main characters. Hoboken, New Jersey: John Wiley & Sons, 2014.
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Khawar, M. (2017). Pinpointing the Tropical Effect – The Relevance of Climate. In: The Geography of Underdevelopment. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-55348-5_2
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DOI: https://doi.org/10.1057/978-1-137-55348-5_2
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