Measuring Heat Waves and Their Effects on Economic Output

We provide novel evidence that accumulated heat exposure affects economic activity in ways that are distinct from shifts in the temperature distribution. We first derive new measures of accumulated heat exposure, which we validate by successfully reproducing well-known heat waves with a global dataset of nearly 1 billion daily temperatures spanning 1979-2016. Using these measures, we find summer heat waves imply lower per-capita output, especially in agriculture. Further, cumulative exposure matters: hot days preceded by several others are significantly more damaging. Estimated agricultural losses from the 2003 France heat wave were 13 times larger than standard approaches suggest.