Household Location Decisions and the Value of Climate Amenities
Paramita Sinha, Martha L. Caulkins, and Maureen L. Cropper ,
Journal of Environmental Economics and Management

We value climate amenities by estimating a discrete location choice model for US households. The utility of each metropolitan statistical area (MSA) depends on location-specific amenities, earnings opportunities, housing costs, and the cost of moving to the MSA from the household head's birthplace. We use the estimated trade-off among wages, housing costs, and climate amenities to value changes in mean winter and summer temperatures. We find that households sort among MSAs as a result of heterogeneous tastes for winter and summer temperatures.

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