Beyond GDP: Quantifying Heterogeneous Impact of Climate Change on Well-being and Social Progress

The growing interest in assessing societal progress and public policies through thelens of Well-being has garnered significant attention from researchers and policymakers.This study examines the relationship between well-being and global warming across 167countries from 1990 to 2019, employing the Social Progress Index (SPI) as a measure ofwell-being. Using a fixed-effects panel data framework, we study temperature impactsby modeling local and global anomalies simultaneously, capturing both within-countryand global climate variation. First, a statistically significant negative relationship existsbetween annual temperature anomalies and well-being, with a 1°C global(local) meantemperature deviation leading to a 0.8324(0.096)-point decline, respectively. Second, precipitation anomalies show no significant effect on the SPI. Third, winter temperatureanomalies and cold spells have a greater impact on well-being than other seasons or hotspells. Fourth, poorer regions, hotter climates, the global south, and countries with weakinstitutions are disproportionately affected by temperature deviations. Fifth, the impactof temperature on well-being persists over the medium term, lasting about four years