Effect of Climate and Geography on worldwide fine resolution economic activity

TL;DR

This study demonstrates that geographic and climatic factors, especially climatic variability, significantly explain and predict fine-resolution global economic activity, enhancing understanding of spatial economic disparities.

Contribution

It provides a detailed analysis showing how geography and climate, including climatic variability, influence economic activity at a fine geographical scale, with improved predictive models.

Findings

Latitude is the most important predictor when considered alone.

Climatic variability improves the accuracy of economic activity predictions.

Geography and climate can satisfactorily explain worldwide economic activity.

Abstract

Geography, including climatic factors, have long been considered potentially important elements in shaping socio-economic activities, alongside other determinants, such as institutions. Here we demonstrate that geography and climate satisfactorily explain worldwide economic activity as measured by the per capita Gross Cell Product (GCP-PC) at a fine geographical resolution, typically much higher than country average. A 1{\deg} by 1{\deg} GCP-PC dataset has been key for establishing and testing a direct relationship between 'local' geography/climate and GCP-PC. Not only have we tested the geography/climate hypothesis using many possible explanatory variables, importantly we have also predicted and reconstructed GCP-PC worldwide by retaining the most significant predictors. While this study confirms that latitude is the most important predictor for GCP-PC when taken in isolation, the accuracy of the GCP-PC prediction is greatly improved when other factors mainly related to variations in climatic variables, such as the variability in air pressure, rather than average climatic conditions as typically used, are considered. Implications of these findings include an improved understanding of why economically better-off societies are geographically placed where they are