Hedonic Pricing of Climate Change Impacts to Households in Great Britain

This study investigates the amenity value of climate to British households. By using the hedonic price approach, the marginal willingness to pay for small changes in climate variables, specified as averages and ranges, is derived. The estimates suggest that British people would typically prefer a greater distribution of precipitation across the seasons (i.e. holding annual precipitation constant, drier summers and wetter winters are preferred). Higher temperature ranges are likely to reduce welfare. Moderate global warming with warmer winters and drier summers might thus benefit British households. In particular we find that those places with little or average range in rainfall like Nottingham and those with a huge range of annual temperature like the Boroughs of London might profit. Places already characterized by a broad range of annual precipitation like Aberdare in Mid Glamorgan on the other hand would most likely lose from climate change.