Adaptation to climate change: air-conditioning and the role of remittances

Do remittances improve the ability of households to adapt to global warming? We try to answer this question by studying the behaviours of households in Mexico, a country that experiences a large and stable flow of remittances. Nationally representative household surveys indicate that Mexican households respond to the high temperature levels by purchasing air-conditioning, whose adoption is on the rise. We inquire whether and to what extent remittances are used to adopt and operate air-conditioning to maintain thermal comfort at home. We find an important role of remittances in the climate adaptation process, with large differences between coastal and inland regions, as well as among different income groups. We conclude by showing the overall increase in welfare households attain by adopting air-conditioning.