The impact of climate risk on household financial resilience

Climate change has become a common challenge facing human society today, which will not only affect macroeconomic society, but also affect microeconomic entities. Studying the impact of climate risks on microeconomies is of great significance for us to build climate-resilient societies. This paper empirically studies the impact of climate risk on household financial resilience by matching the daily observation data of the National Oceanic and Atmospheric Administration’s Global Weather Station with the data of the China Household Finance Survey (CHFS). The results show that climate risk significantly weakens household financial resilience; Extreme weather such as extreme heat, extreme low temperatures, extreme rainfall and extreme drought all have a significant negative impact on household financial resilience. The mechanism analysis shows that climate risk will weaken the financial resilience of families by affecting the physical health of family members. This paper expands the research on climate risk on social microeconomic units, and also provides policy evaluation and practical enlightenment for the design of climate-resilient social policies.