Studying the Impact of Geography and Climate on Individual Income Levels in Developing Countries - Research Paper Example

The paper "Studying the Impact of Geography and Climate on Individual Income Levels in Developing Countries" is a wonderful example of a research paper on macro and microeconomics. An in-depth analysis of a number of countries across the globe, reports that the national per capita income falls by roughly 8.5% with the average rise in temperature, which simply suggests how warming influences the future standards of living. A myriad of decision-makers globally has in the past looked at the economic costs of adopting policies to control climatic conditions such as the cap and trade programs.

The opportunity cost of implementing strict environmental policies is apparent in a number of countries. If the changes in the economic policies are not checked, it is likely that the nations will be doing serious economic harm to their future. Therefore, preventing the costs with a clear and sound climate policy will be beneficial to the economy in the long run. The best approach for nations to address the problem of reduced wealth creation because of poor climatic conditions is to look at the historical relationship between national income and related climatic variables.

A clear fact is that hot countries and those facing harsh climatic conditions are usually negatively impacted as opposed to those with better climatic situations. During this analysis, GDP will be used as the dependent variable with independent variables being, arable land, latitude, forest cover among others. With possible variance amongst the variables, this paper will analyze this variance to test and interpret the condition of multicollinearity using regression analysis, as some geographical factors might be highly correlated.

Table of Contents 1.1Research Objectives 5 3.1Data Collection 11 3.2 Data Analysis 12 From the above table the average income (GDP) for the countries that participated in the study stood at USD 112.03 Billion with the average extent of deviation from the group standing at 217.25 Billion. The divergence between the countries which were considered for the study stood at 47198. The average arable land in square kilometers for these countries stood at 558 with an average deviation and variance of 266.

22 and 70872 respectively.