Investigators from Federal Reserve Bank Target Climate Change (A Macro Study of the Unequal Effects of Climate Change): Climate Change

2026 MAY 22 (NewsRx) -- By a News Reporter-Staff News Editor at Climate Change Daily News -- Investigators publish new report on Climate Change. According to news reporting from San Francisco, California, by NewsRx editors, the research stated, “This paper develops a macro heterogeneous-agent model to quantify the distributional impacts of higher temperatures resulting from climate change in the United States. Households adapt to temperature through two channels: an intensive margin-adjusting energy use for heating and cooling-and an extensive margin-deciding whether to purchase temperature-control equipment such as a heater, air conditioner or heat pump.”

The news correspondents obtained a quote from the research from Federal Reserve Bank, “I estimate the production functions for household heating and cooling from a unique product-level data set and calibrate the remaining parameters to match variation in energy expenditures and budget shares with income levels. I find that the welfare effects of climate change vary substantially with income and region. In colder areas, climate change increases inequality in lifetime welfare. While all households experience greater cooling needs, the costs are particularly acute for lower-income households, who purchase air conditioners that they did not previously need.”

According to the news reporters, the research concluded: “In warmer areas, the opposite pattern reduces welfare inequality.”

This research has been peer-reviewed.

For more information on this research see: A Macro Study of the Unequal Effects of Climate Change. The Economic Journal, 2026. The Economic Journal can be contacted at: Oxford Univ Press, Great Clarendon St, Oxford OX2 6DP, England.

Our news journalists report that additional information may be obtained by contacting Stephie Fried, Federal Reserve Bank, 101 Market St, San Francisco, CA 94105, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1093/ej/ueaf135. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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