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Measuring the impact of climate change on within-country income inequality

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This paper uses an OLS model to find a sophisticated correlation between climate change and within-country inequality, using the number of people affected by natural disasters as the main independent variable. The study found that a 10% increase in the number of people affected by climate disasters corresponds with a 0.07% increase in the Gini coefficient. Moreover, the results reveal different patterns of climate and economic variables’ effects on income inequality in four different income group categories. Specifically, natural disasters impact income inequality in higher-income countries, while it does not in lower-income countries. Furthermore, the temperature is correlated with higher inequality in the lowest-income countries but less inequality elsewhere, confirming conclusions of climate inequality from previous academic literature. On the other hand, positive forest area changes and higher GDP per capita are observed to lessen income inequality in most income groups. Lastly, since the results confirm the simultaneity of the issue, I argue for income inequality minimising economic development policies as the means to mitigate climate change effects.

This talk is part of the Darwin College Humanities and Social Sciences Seminars series.

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