Research Highlights Featured Chart
January 29, 2025
Beating the heat
How much are people willing to pay to avoid uncomfortable temperatures?
Source: Joshua Peacock jcpeacock
As climate change makes extreme temperatures more common, assessing the value people place on comfortable weather has become increasingly important for policymakers. But measuring individuals’ willingness to pay for comfort is a challenging task.
In a paper in the American Economics Journal: Applied Economics, authors , , and estimate that by the end of this century, the extra discomfort from hotter temperatures could cost Americans billions of dollars per year. The findings come from an unexpected place: America’s favorite pastime.
The researchers analyzed attendance records from Major League Baseball games between 1950 and 2000. The period covers over 80,000 games for which hourly weather station data is available.
Figure 2 from the authors’ paper tracks baseball attendance throughout the season for five major teams: the Atlanta Braves, the Boston Red Sox, the Chicago Cubs, the Los Angeles Dodgers, and the Texas Rangers.
from Kuruc et al. (2024)
To make like-for-like comparisons between different stadiums and eras, the researchers normalized the numbers as a percentage of each team's attendance during opening week (y-axis), helping to account for differences in stadium size and local fan base.
Unsurprisingly, fans didn’t like going to games when it was very hot or cold. Attendance dropped by about 16 percent on days over 95°F and 20 percent on days below 55°F. However, the chart also reveals that while all teams saw their attendance peak in midsummer, teams in hotter cities, like Texas and Atlanta, saw much steeper drops during the August heat.
Using ticket prices and attendance patterns, the authors estimated that people would pay about $4.11 to watch a game in 70°F to 75°F weather rather than one in 95°F heat. For games with temperatures under 55°F, people were willing to pay slightly more—$5.17 to $6.55—for better weather. These numbers imply that, for a typical 2.7-hour baseball game, people are willing to pay about $1.53 per hour to avoid being in very hot temperatures and $1.93 per hour to avoid being in very cold temperatures.
Since the average US citizen spends about 30 minutes outside on extreme weather days, these estimates suggest that under a business-as-usual climate change scenario the additional annual total losses from very hot days will be on the order of $2.31 billion by 2080–2090. Overall, disutility from heat waves isn't as big as other climate change costs—such as health impacts or reduced economic productivity—but calculations show that it may be as significant as some major weather disasters.
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“The Willingness to Pay for a Cooler Day: Evidence from 50 Years of Major League Baseball Games” appears in the January 2024 issue of the American Economic Journal: Applied Economics.