Measuring Local Climate Change Attention: Does It Affect Households and Firms?

Leonard Kostovetsky, Lin Peng, Christopher Rauh, and Muhammed Yonac

♦ We develop a novel, high-frequency measure of local climate change attention based on a comprehensive dataset covering over 5,000 U.S. newspapers across all major population centers. Heightened attention significantly increases household investment in green ETFs and purchases of flood insurance, prompts local firms to discuss climate risk more frequently, and improves firms’ environmental performance. Our measure captures substantial spatial and temporal variation associated with local demographics, social media, and environmental events, and it reflects variation from newspaper ownership and peer attention. By contrast, a widely used existing climate attention measure shows no significant relationship with these household and firm outcomes.

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