This paper explores whether the spread of air conditioning in the United States from 1960 to 1990 affected quality of life in warmer areas enough to influence decisions about where to live, or to change North-South wage and rent differentials. Using measures designed to identify climates in which air conditioning would have made the biggest difference, I found little evidence that the flow of elderly migrants to MSAs with such climates increased over the period. Following Roback (1982), I analyzed data on MSA wages, rents, and climates from 1960 to 1990, and find that the implicit price of these hot summer climates did not change significantly from 1960 to 1980, then became significantly negative in 1990. This contrary to what one would expect if air conditioning made hot summers more bearable. I presented evidence that hot summers are an inferior good, which would explain part of the negative movement in the implicit price of a hot summer, and evidence consistent with the hypothesis that the marginal person migrating from colder to hotter MSAs dislikes summer heat more than does the average resident of a hot MSA, which would also exert downward pressure on the implicit price of a hot summer.
Here Scott Sumner details the import of state income taxes. In my view not the “main” factor, but a significant factor nonetheless, excerpt: “On the west coast, all states grew faster than the national average. Yes, its climate is nicer that the south central region. But look at the more detailed data and you’ll see that hot and sunny Washington state and Alaska grew the fastest of five bordering the Pacific. And oh by the way, Washington and Alaska are the only two with no state income tax.” I’ll add this point: to the extent income inequality is rising, a relatively small number of cross-state migrants can lead to a noticeable difference in cross-state growth and job creation rates. And the high earners are precisely those who are most able and most likely to leave a high-tax state for a low-tax state.
Paul Krugman has had a few posts on this question, most recently this one, the first one here. Krugman is right in asserting a major role for air conditioning, but there is a subtle framing point which is sometimes neglected. The most on-point study is this piece from Jordan Rappaport (pdf):
U.S. residents have been moving en masse to places with nice weather. Well known is the migration towards places with warm winters, which is often attributed to the introduction of air conditioning. But people have also been moving to places with cooler, less-humid summers, which is the opposite of what is expected from the introduction of air conditioning. Nor can the movement to nice weather be primarily explained by shifting industrial composition or by elderly migration. Instead, a large portion of weather-related moves appear to be the result of an increased valuation of nice weather as a consumption amenity, probably due to broad-based rising per capita income.
Overall Rappaport concludes that “nice [warm] weather is a normal good” is the more important driving force behind the movement to the Sun Belt than is air conditioning per se, though of course air conditioning makes nice warm weather all the nicer. Evidence from compensating differentials also indicates that “…the decreased discomfort from heat and humidity afforded by air-conditioning has not been the primary driver of the move to nice weather.” (p.26)
From 1880 to 1910, Americans overall are moving to places with bad (cold) weather. In the 1920s they start moving, on net, to places with nicer weather and that trend has not let up. The arrival of affordable air conditioning in the postwar era bumps this up a bit, but the main trend already was in place. Furthermore air conditioning has been in the south for quite a while now, but migration in that direction continues. In his second post on the topic, Krugman refers to this as a “gradual adjustment” to AC, but it seems to better fit the nice weather as a normal good story. We’ll know more if we see this migration continuing, but I expect it will. At some point it won’t be plausible to call the ongoing movement a “lagged response” to the introduction of air conditioning, but again it will fit the normal good story pretty smoothly.
Note also that life expectancy is notably higher in warm weather than cold weather. Deschenes and Moretti conclude (pdf): “…The longevity gains associated with mobility from the Northeast to the Southwest account for 4% to 7% of the total gains in life expectancy experienced by the U.S. population over the past thirty years.”
That again points toward a “normal good” explanation, with air conditioning playing a supporting role.
That all said, if you look at the larger political debate going on here, Krugman is correct in arguing that lower taxes are the not main reason for this migration, even though the median voter in these states probably approves of such relatively low tax rates. In any case, there is a clearer and better version of the weather hypothesis which can be put forward.
In this article, we investigate cosmopolitan attitudes among the people often considered the most cosmopolitan – the elite. Studying the typical class of frequent travellers provides a particularly good opportunity to study the relationship between transnational activities and cosmopolitanism. We also comprehensively investigate the link between postmaterialist values and cosmopolitan attitudes. We test our arguments using an original dataset that includes a relatively large sample of the German positional top elite in the years 2011 and 2012. A comparison between these data and data from a general population survey shows that while transnational activities affect the attitudes of ordinary citizens, increased travelling does not make elites more cosmopolitan. We discuss several reasons why this might be the case. We also observe that postmaterialist values and the ideological environment of the elite play a key role. Finally, we tentatively suggest that cosmopolitan elites do not endanger national social cohesion, as some fear they might. We show that cosmopolitanism and localism are not mutually exclusive and that members of the German elite feel even more attached to their nation than ordinary Germans.
The key to understanding the economy of New Zealand is that it’s an industry cluster, and the industry in question is agriculture. Or, and this might be a bit more controversial, the industry in question is agriculture marketing, the most perfect example of which being the way in which the Chinese gooseberry was renamed the “kiwifruit” and production ramped up exponentially to meet US and European demand. At some point, if they can transport them without bruising, I’d guess that they’ll have a go at doing the same thing with the Feijoa, a kind of South American guava that’s very popular domestically. Marketing isn’t looked down on as a frivolous activity for people not clever enough to do science in New Zealand, as far as I can see – farmers, if they want to enjoy middle-class incomes, have to be very aware about the difference between the stuff that comes out of the ground or off the animal, and the sort of thing that people want to see in their shops.
I liked this bit (among many others) too:
One of the things that originally got me interested in the subject of economics was asking the question “How come they’re able to send lamb and butter all the way from New Zealand and still sell it cheaper than Wales?”, and never being very satisfied with the answer.
Just how confident is Los Angeles property broker Erik Coffin that he can interest Chinese clients in high-end Las Vegas villas? He’s charging $4 million a month for a quick glimpse.
It isn’t just any tour. The marketing push is set to start next month for these twice-monthly journeys that cost $250,000 a pop for a seven-day, private jet and Rolls Royce-chauffeured trip to the American heartland. Eight-person groups also will be offered consultations on plastic surgery, picking the sex of a child and wealth-management.
“It’s already a win for us,” said Coffin, 42, who employs 18 Mandarin speakers, almost a third of his staff, at Gotham Corporate Group, which recently opened an office in Beijing.
Here is one response:
“People usually come to the U.S. shopping for luxury bags or expensive clothes, but I bought a home,” said Lin, who owns a petrochemical export business in the eastern Chinese province of Zhejiang. “Maybe I’m crazy and a bit impulsive, but it was a better deal than buying a similar type of home in downtown Shanghai. And I just really like the city. It’s as simple as that.”
Wednesday night I was taken on a restaurant tour of Scarborough — four different places — plus rolls from a Sri Lankan locale, consumed in the office of the Dean of UT Scarborough and with the assistance of Peter Loewen.
After that eating, and lots of driving around and looking, I concluded Scarborough is the best ethnic food suburb I have seen in my life, ever, and by an order of magnitude. I hope you all have the chance to visit Scarborough, Ontario.
If you are wondering where I went, that is beside the point.
More than 99.9 percent of all wild gnus, also called wildebeest, from the Afrikaans for “wild beast,” have dark coats. But this three-year-old golden bull and his many offspring are not an accident. They have been bred specially for their unusual coloring, which is coveted by big game hunters.
These flaxen creatures are the latest craze in South Africa’s $1 billion ultra-high-end big-game hunting industry. Well-heeled marksmen pay nearly $50,000 to take a shot at a golden gnu — more than 100 times what they pay to shoot a common gnu. Breeders are also engineering white lions with pale blue eyes, black impalas, white kudus, and coffee-colored springboks, all of which are exceedingly rare in the wild.
“We breed them because they’re different,” says Barry York, who owns a 2,500-acre ranch about 135 miles east of Johannesburg. There, he expertly mates big game for optimal — read: unusual — results. “There’ll always be a premium paid for highly-adapted, unique, rare animals.”
…No one disputes that there’s money to be made in rare big game. Africa Hunt Lodge, a U.S.-based tour operator, advertises “hunt packages” to international clients traveling to South Africa that include killing a golden gnu for $49,500, a black impala for $45,000, and a white lion for $30,000.
There is more here, and for the pointer I thank Kaushal Desai.
Given all the recent global currency changes, and other turmoil, what is the best vacation destination for American’s who earn dollars.
Is it possible that I/others can go somewhere previously unaffordable because of the changes?
The dollar is much stronger in many parts of the world these days. But the currency of Ukraine has taken an especially steep dive as of late. It’s down about 17% in the last two weeks and that is mostly for geopolitical reasons, not hyperinflation. So go quickly, and avoid the East! (Whoops! Kharkiv too…) I hear Kiev is lovely in February.
Given government shenanigans, it is hard to get a read on the true price level and real exchange rate in Argentina, but the country has offered incredible bargains during crises in times past, and our winter is their summer. Brazil has become much cheaper, relative to the past, but it still feels more expensive than traveling in the U.S., for the most part. But if you are convinced you must go there, try now. Tokyo is much cheaper than people think, but that has been the case for quite a while.
In my opinion most of the eurozone is at about PPP right now for Americans, Berlin has the best bargains, maybe Paris the worst. Spain and Portugal to me seem to have had a lot of unreported deflation. Just say nein to die Schweiz, they let Scott Sumner down and now you must pay for that.
The first Sacred Introvert Retreat Tour will take place this coming May, led by founder Lisa Avebury. Over ten days, participants will visit Glastonbury and other sites in south east England. Travellers will each have their own room and every other day will be a ‘local’ day, when visitors can rest and recharge in the peaceful surroundings of Glastonbury Abbey Retreat. The tour includes visits to mystical, historical sights such as the stone circle and the Chalice Well — where the Holy Grail is supposedly hidden. There are relaxed day trips to medieval churches and roman baths, optional yoga sessions and evening activities such as torchlit walks and bonfires.
Lisa Avebury, a self-proclaimed introvert, founded the retreat company to give quieter individuals a group travel option which catered to their needs, where silences are comfortable and socializing is optional, not mandatory. The trips costs USD 3,795 excluding flights and Avebury hopes it will be the first of many.
The tourism minister says that even though the Greek Prime Minister is attacking all-inclusive resorts as it identifies problems with the country’s economy, it has no plans to make crackdown on these properties ‘its mission’.
How reassuring. Greece needs some Very Serious People in charge! Right now it doesn’t have them. And as you know, one thing worse than the Very Serious People is…the Not Very Serious People. I think someone told them that all-inclusive resorts might drain off domestic aggregate demand (p.s. investment matters too, including for demand).
Oh, had I mentioned that tourism provides 15% of Greek gdp? (higher by some estimates, perhaps up to 20%). I’m all for debt forgiveness in this context, but right now the Greeks need to get serious or they will tumble off the cliff and soon.