Climate, geography, income per capita and growth - Literature review Example

Geography and environment has a closer impact on socio-economic development of a region. Historical data has revealed that geography has some effect on shaping the economic history. However, the amount of variance is an important consideration. Tropics are varied by braod climatic zones and economies as well (Torres & Mendez, 2000; 2002, Inter-American Development Bank, 2000). As a result, the research would identify the key geographical and climatic factors from the national database and analyze its relationship with income per person longitudinal data for a time period of 1950 to 2014.

This paper will analyze this variance to test and interpret the condition of multicollinearity using a regression analysis, as some geographical factors might be highly correlated impacting the ultimate results. Analyzing the relationship between the major geographical features, such as altitude, climate, topography on the economic growth and prosperity with individual municipal incomes and their inequalities. Previous research has established a close relationship between economic development and geographical characteristics, such as topography, altitude, precipitation, temperature and rainfall etc.

, of a region. In this pretext, the tropical economies have lower income levels and growth rates than rest of the world. Temperate regions are more prosperous in this respect. The impact of geography on economic performance was considered exogenous for a very long time by economists (Rodrik & Trebbi, 2004). In fact there are direct channels influencing the effect of geography on productivity (Fujita, Krugman & Venables, 1999; Gallup, Sachs & Mellinger, 1999), in terms of productivity of primary activities, such as agriculture, farming, mining, fishing and forestry (Safford & Palacios, 2002).

The classical Malthusian theory has stressed on how extremes of climate and temperature might diminish the productivity of labor as a consequence of spillovers and positive