The amenity value of climate to households in Germany

Despite the importance of as comprehensive as possible damagecost estimates to cost benefit analyses of global attempts toreduce greenhouse gas emissions, few researchers have attemptedto monetize the direct impact of climate change on households.This study uses the hedonic technique to measure the amenityvalue of the climate to German households. Evidence suggeststhat the amenity value of climate variables is capitalized mainlyinto hedonic house price differentials. Overall, German householdsappear to prefer warmer winters with less rainfall. Combiningestimates of amenity values with the predicted changes in climateassociated with the IPCC's A2 emissions scenario we find thatthe overall impact of climate change on German households, whilstnegative, is typically not statistically different from zero.This occurs in part because the prediction is for warmer butwetter winters and also because the amenity value of some climatevariables cannot be measured with sufficient precision.