Publication

The main purpose of this paper is to provide an empirical test of the hypothesis that climate is an important input to household production functions and to measure the impact of climate on households’ cost of living. Our results indicate that warmer temperatures result in a small but statistically highly significant reduction in the cost of living. Combining these estimates with climate change scenarios associated with the IPCC A2, A1B, and B1 emissions scenarios other things being equal points to a slight reduction in Japanese households’ cost of living.