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Voluntary Exposure Benefits and the Costs of Climate Change

We identify behavioral responses, defined as “voluntary exposure benefits,” that have the potential to offset measured costs of climate change. We quantify these responses for the transportation sector. We find that warmer temperatures and reduced snowfall are associated with an increase in fatal accidents. While the application of these results to climate predictions suggests that weather patterns for the end of the century would lead to 381 additional fatalities per year, the associated welfare losses are almost completely offset by voluntary exposure benefits from increased traveling. Our results motivate carefully examining behavioral mechanisms to accurately estimate the welfare effects of climate change.