  Climate (change) affects the prices of goods and services in different
countries or regions differently. Simply relying on aggregate measures or
summary statistics, such as the impact of average country temperature changes
on HICP headline inflation, conceals a large heterogeneity across (sub-)sectors
of the economy. Additionally, the impact of a weather anomaly on consumer
prices depends not only on its sign and magnitude, but also on its location and
the size of the area affected by the shock. This is especially true for larger
countries or regions with diverse climate zones, since the geographical
distribution of climatic effects plays a role in shaping economic outcomes.
Using time series data of geolocations, we demonstrate that relying solely on
country averages fails to adequately capture and explain the influence of
weather on consumer prices in the euro area. We conclude that the information
content hidden in rich and complex surface data can provide valuable insights
into the role of weather and climate variables for price stability, and more
generally may help to inform economic policy.
