Climate and happiness

Climate is an important input to many human activities. Climate affects heating and cooling requirements, health, clothing and nutritional needs as well as recreational activities. As such, it is to be expected that individuals will have a preference for particular types of climate. This paper analyses a panel of 67 countries attempting to explain differences in self-reported levels of happiness by reference to, amongst other things, temperature and precipitation. Various indices are used for each of these variables, including means, extremes and the number of hot, cold, wet and dry months. Using a panel-corrected least squares approach, the paper demonstrates that, even when controlling for a range of other factors, climate variables have a highly significant effect on country-wide self-reported levels of happiness. On the basis of these results, it is determined that differential patterns of anthropogenically induced climate change might alter dramatically the distribution of happiness between nations, with some countries moving towards a preferred climate and others moving further away. We find that high-latitude countries included in our dataset might benefit from temperature changes. Countries already characterized by very high summer temperatures would most likely suffer losses from climate change.