Extreme high temperatures and adaptation by social dynamics: Theory and Evidence from China

Using a novel city-level high-frequency panel data set of social and public events in Chinese cities, we document that extreme high temperatures significantly reshape social dynamics. Extreme high temperatures lead to an increase in social cooperation, and the effects are more salient when productivity is lower and labor is more intensively used. This implies extreme high temperatures boost the relative returns of cooperation given lowered productivity. Our estimates and quantitative model suggest that the human race adapts to global warming by reshaping its social dynamics: adaptation via social dynamics offsets about one-third of the negative impacts of extreme high temperatures on the economy.