Extreme Weather and Life Satisfaction: Vulnerabilities and Adaptive Strategies in China

This paper examines the effects, individual sensitivity, and adaptive behavior related to exposure to extreme weather events on life satisfaction. Using detailed daily temperature and precipitation data and a representative family survey in China, we define a unique extreme weather threshold for each county. The results demonstrate that exposure to extreme cold and rainfall significantly reduces life satisfaction. Heterogeneity and channel analyses reveal that rural and low-income households are particularly vulnerable to income and asset losses. In contrast, urban and high-income residents are better equipped to manage these risks, as they can afford medical care, experience less income loss, and show no significant change in total assets. Additionally, our analysis indicates that individuals with higher insurance levels or those living in cities with local adaptation and effective risk management measures do not experience negative effects. These findings shed light on urban planners and individuals in China as well as other developing countries facing the challenges of climate change.