Jeff Biddle on migration and air conditioning

Here is the abstract of his piece “Air Conditioning, Migration, and Climate-Related Rent Differentials“:

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.

The pointer is from Ross Emmett in the MR comments section, very useful comments overall.  Biddle has two other pieces on the history of air conditioning, and Biddle has other interesting pieces as well, he is apparently an underappreciated economist.

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.


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