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Asset ownership turns climate exposure into inequality

Martins, Igor LU orcid ; Grab, Stefan and Green, Erik LU (2026)
Abstract
As climate change alters weather risk, wealth is often treated as a buffer after shocks occur. We show that wealth can shape the economic shock before it arrives by determining which assets households own. In a pre-industrial agrarian society, we link weather to 25,000 household tax records and commodity prices. Households held different production bundles, and the same seasonal weather could raise returns to one bundle while lowering returns to another. Wealthier households more often owned the commodities favoured by observed weather variation, and prices did not systematically offset these differences. These portfolio differences predict next-year changes in movable assets. Years in which weather raised returns to commodities... (More)
As climate change alters weather risk, wealth is often treated as a buffer after shocks occur. We show that wealth can shape the economic shock before it arrives by determining which assets households own. In a pre-industrial agrarian society, we link weather to 25,000 household tax records and commodity prices. Households held different production bundles, and the same seasonal weather could raise returns to one bundle while lowering returns to another. Wealthier households more often owned the commodities favoured by observed weather variation, and prices did not systematically offset these differences. These portfolio differences predict next-year changes in movable assets. Years in which weather raised returns to commodities disproportionately owned by wealthier households were years of wider movable-asset inequality. Wealth determined whether weather became loss or gain. (Less)
Please use this url to cite or link to this publication:
author
; and
organization
publishing date
type
Working paper/Preprint
publication status
published
subject
publisher
Research Square
DOI
10.21203/rs.3.rs-9859396/v1
project
The establishment, growth and legacy of a settler colony: Quantitative panel studies of the political economy of Cape Colony
language
English
LU publication?
yes
id
8c043482-2c30-49f5-9be9-035a0f08324f
date added to LUP
2026-06-01 15:09:28
date last changed
2026-06-02 10:16:28
@misc{8c043482-2c30-49f5-9be9-035a0f08324f,
  abstract     = {{As climate change alters weather risk, wealth is often treated as a buffer after shocks occur. We show that wealth can shape the economic shock before it arrives by determining which assets households own. In a pre-industrial agrarian society, we link weather to 25,000 household tax records and commodity prices. Households held different production bundles, and the same seasonal weather could raise returns to one bundle while lowering returns to another. Wealthier households more often owned the commodities favoured by observed weather variation, and prices did not systematically offset these differences. These portfolio differences predict next-year changes in movable assets. Years in which weather raised returns to commodities disproportionately owned by wealthier households were years of wider movable-asset inequality. Wealth determined whether weather became loss or gain.}},
  author       = {{Martins, Igor and Grab, Stefan and Green, Erik}},
  language     = {{eng}},
  month        = {{05}},
  note         = {{Preprint}},
  publisher    = {{Research Square}},
  title        = {{Asset ownership turns climate exposure into inequality}},
  url          = {{http://dx.doi.org/10.21203/rs.3.rs-9859396/v1}},
  doi          = {{10.21203/rs.3.rs-9859396/v1}},
  year         = {{2026}},
}