The effect of heat waves on economic activity: evidence from Latin America

The researchers document that extreme heat has an economically and statistically significant negative effect on economic growth in Latin America. Because extreme heat impacts physical and cognitive performance, heat waves could have a particularly large impact on economic activity. In particular, the researchers find that the magnitude of the negative impact is increasing in both the intensity and the duration of heat. Further, they find that the effect is driven by absolutely hot days (days above a given threshold in degrees Celsius) as opposed to days that are relatively hot for a given location (above a given number of standard deviations above the region’s monthly mean temperature).