The Cost of Weather in US: Up to $243 Billion a Year

Even routine fluctuations in precipitation and temparture have an impact on the economy. CREDIT: NOAA's National Weather Service (NWS) View full size image

Routine weather — rainy spells, warmer than average days — can cause the United States economy to lose or gain as much as $242.5 billion in a year, according to a new calculation. In other words, bad weather can lead to a lean year, while the right scenario can mean a bonus.

This $485 billion variation covers only normal weather, not devastating events like tornadoes and hurricanes, or climate change, which is expected to bring more extreme weather.

"It is something that really hasn't been done quantitatively before for the whole country using accepted economic methods and data," said lead researcher Jeff Lazo, an economist who directs the Societal Impacts Program at the National Center for Atmospheric Research. "I think what this does is it gives us a first idea, not the best number or the final number, how much impact average weather has on the U.S. economy."

Using 24 years' worth of economic data and weather observations, the researchers modeled the relationship between economic output and variation in precipitation and temperature. All of the 11 nongovernmental economic sectors they looked at, such as agriculture, transportation and manufacturing, were sensitive to weather.

They then ran simulations on the models, using 70 years of weather data and holding other economic factors, like capital, labor and energy, constant to see how much effect weather had on the total economy. [Read: 7 Rare Weather Events]

They found that everyday weather could cause as much as a 3.4-percent variation in U.S. gross domestic product, the value of goods and services produced by a nation. In 2008 dollars, this came out to a range of $485 billion (meaning a loss or gain of $242.5 billion).

The study, published by the Bulletin of the American Meteorological Society, found that while no state escaped the impacts of weather, some were more affected than others. New York was the most sensitive, and Tennessee was the least, although it is not clear why. Certain sectors of the economy also showed variation in how sensitive they were to weather, with mining and agriculture taking the biggest possible hits from everyday weather.

The researchers plan to continue refining their calculations, Lazo said.

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