The impact of weather forecast accuracy on the economic value of weather-sensitive industries

Abstract This paper investigates the economic value of weather forecast accuracy in weather-sensitive industries. By analyzing statistical data from eight major industries across 31 provinces in China and meteorological data spanning from 2007 to 2021, we examine the sensitivity of industries to meteorological factors. The results reveal that improving weather forecast accuracy significantly enhances the output levels of all industries, with weather-sensitive industries experiencing a more pronounced impact. For every 1% increase in weather forecast accuracy, the output of non-sensitive industries will increase by around 1.5%, and that of weather-sensitive industries will increase by 2–3%. Moreover, we construct composite forecast indices and perform robustness tests to validate the findings. Based on the empirical results, we put forward policy recommendations to enhance the economic value of weather forecasting, including improving forecast technology and accuracy, broadening information dissemination channels, and promoting synergistic cooperation between meteorological departments and industries. These measures can empower decision-making, reduce risks, and improve efficiency across various sectors, ultimately contributing to sustainable economic development.