Too hot to think straight? How heat affects our decisions

CHE RESEARCH BITES

By Michelle Escobar Carias, David Johnston, Rachel Knott and Rohan Sweeney

05 August, 2024

Extremely hot weather, which is occurring more frequently, can negatively affect our behaviour. As much of Europe endures heatwaves, a new study from Monash Business School’s Centre for Health Economics reveals how extreme heat can impair our ability to think clearly, making us more impatient and prone to making irrational choices.

A research team led by recent PhD graduate Dr Michelle Escobar Carias analysed data from the Indonesian Family Life Survey linked to NASA weather data.

But while hot days are challenging, it is actually hot nights (above 25°C) that lead to more irrational and impatient behaviour, and poor economic decisions, their findings showed

Poor sleep quality on hot nights reduces cognitive function the next day, especially in the area of maths skills, which are crucial for making risky decisions and intertemporal choices, the study found.

The impacts are particularly large for poorer households, who have limited access to air conditioning and therefore find it harder to escape the heat.

Why is this important? Because many small impaired decisions can accumulate and have lasting consequences, affecting everything from saving money to investing in health and education.

And as climate change makes extreme heat more common, the challenge of keeping cool is becoming more pressing, especially in households and geographic regions with greater economic constraints.

Finding ways to cool homes in these settings is crucial but difficult, especially as people around the globe struggle with rapidly increasing living costs. Many households lack the resources for an air conditioning unit and the electricity to power it.

We must find sustainable and accessible solutions that do not simply shift the burden to those least equipped to handle it.

Find the original article here: Michelle Escobar Carias, David W Johnston, Rachel Knott, Rohan Sweeney, Temperature’s Toll on Decision-Making, The Economic Journal, 2024; https://doi.org/10.1093/ej/ueae036.

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CHE Research Bites are short, easy-to-understand summaries of our recent academic papers highlighting new evidence and insights on topical issues in the health and healthcare sectors.

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