With increasing heat waves, in Australia, Europe and the rest of the world, a new study from Monash Business School’s Centre for Health Economics reveals that extreme heat can impair our ability to think clearly, make 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.
What they found was that 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.
The study found that poor sleep quality on hot nights reduces cognitive function the next day, particularly in the area of maths skills. These are crucial for making risky decisions and sequential choices. The researchers said many small, impaired decisions can accumulate and have lasting consequences. This could have serious implications for the workplace.
People in poorer households, who have limited access to air conditioning and therefore find it harder to escape the heat, are likely to be most impacted. Workers from lower socio-economic backgrounds could be at higher risk of injury at work.
Cooling homes is crucial but difficult, especially as working people struggle with increasing living costs, and may lack the resources for air conditioning and the electricity to power it.
Read more: Too Hot to Think Straight? How Heat Affects Our Decisions - Monash Business School Original article: Michelle Escobar Carias, David W Johnston, Rachel Knott, Rohan Sweeney, Temperature’s Toll on Decision-Making, The Economic Journal, 2024. [Abstract].