Correcting for spatial and temporal dependence in estimating the economic effect of extreme heat.

Accounting for spatial and temporal dependence reduces the estimated economic impact of extreme heat from significant to statistically uncertain, with credible intervals often including zero.

• Why it matters: Understanding the true economic effects of extreme heat is crucial for policy and climate adaptation strategies, but previous estimates may have overstated certainty by ignoring data dependencies.
• What they did: The authors reanalyzed the data using methods that account for spatial and temporal dependence, including permutation tests, Bayesian hierarchical models, and out-of-sample predictions, involving multiple countries and years.
• The result: They found that the effect size shrinks dramatically, with intervals often spanning zero, indicating that the economic impact of extreme heat is less certain than previously claimed, and adding climate variables does not improve predictive accuracy.