Clean Sweep
Escaping Air Pollution: Immigrants, Students, and Spillover Effects on Property Prices Abroad
Yuk Ying Chang & Sudipto Dasgupta
Review of Finance, forthcoming
Abstract:
We construct a time-series of news coverage about air pollution in China for the period 1977-2019. Our measure of abnormal news coverage of China’s air pollution (ANC) is uncorrelated with growth in economic activity or cyclical components of such activity, but strongly correlated with weather-related and atmospheric conditions known to cause air pollution. ANC is associated with more capital flight from China. Focusing on the U.S. as a destination country, we find that ANC is associated with more Chinese citizens emigrating to U.S. regions with stronger ethnic links to China, and more international students enrolling in U.S. institutions with stronger Chinese student links. U.S. regions with stronger ethnic or educational ties to China experience higher property price growth when ANC is higher. Our study suggests that perception of local environmental risk can have major consequences for the cross-border reallocation of capital and labor.
Natural disasters and preferences for the environment: Evidence from the impressionable years
Chiara Falco & Raphael Corbi
Economics Letters, forthcoming
Abstract:
Can preferences for the environment be shaped? In line with the theories of social psychology, we show that natural disasters experienced during early adulthood induce pro-environmental attitudes. We support our findings by exploiting yearly natural disaster variation both within the US and across a sample of 102 countries whose citizens experience disasters at different points in time.
The Impact of Oil and Gas Extraction on Infant Health
Elaine Hill
NBER Working Paper, November 2022
Abstract:
The benefits and costs of resource extraction are currently being hotly debated in the case of shale gas development (commonly known as "fracking"). Colorado provides a unique research environment given its long history of conventional oil and gas extraction and, most recently, shale gas development. To define exposure, I utilize detailed vital statistics and mother's residential address to define close proximity to drilling activity. Using a difference-in-differences model that compares mothers residing within 1 km of a wellhead versus 1-5 km, I find that proximity to wells reduces birth weight and gestation length on average and increases the prevalence of low birth weight and premature birth. I also find an increase in gestational diabetes and hypertension for mothers living near wells. These results are robust to multiple specifications and suggest that policies to mitigate against the risks of living near oil and gas development may be warranted.
Heterogeneity in Enforcement Stringency and Environmental Pollution in the U.S.
Abinash Pati
Emory University Working Paper, November 2022
Abstract:
Legislation guiding environmental policy in the US is set largely at the federal level, whereas, the primary monitoring and enforcement responsibility is decentralized to state & local authorities. Consistent with the idea that households' marginal willingness to pay for environmental quality increases with their wealth, I show that enforcement actions under the Clean Air Act correlate positively with median house prices at the county level. I establish causality using an instrumental variable approach. The effect is stronger in counties with higher social capital, and for those that are located in states with democrat governors. Exogenous increases in local housing wealth lead to a decrease in toxic releases from local polluting plants and an increase in local plants’ pollution abatement initiatives. My results highlight that under federalism, environmental enforcement can become fragmented, when households differ in their marginal willingness to pay for environmental quality.
The 15-Minute City Quantified Using Mobility Data
Timur Abbiasov et al.
NBER Working Paper, December 2022
Abstract:
Americans travel 7 to 9 miles on average for shopping and recreational activities, which is far longer than the 15-minute (walking) city advocated by ecologically-oriented urban planners. This paper provides a comprehensive analysis of local trip behavior in US cities using GPS data on individual trips from 40 million mobile devices. We define local usage as the share of trips made within 15-minutes walking distance from home, and find that the median US city resident makes only 12% of their daily trips within such a short distance. We find that differences in access to local services can explain eighty percent of the variation in 15-minute usage across metropolitan areas and 74 percent of the variation in usage within metropolitan areas. Differences in historic zoning permissiveness within New York suggest a causal link between access and usage, and that less restrictive zoning rules, such as permitting more mixed-use development, would lead to shorter travel times. Finally, we document a strong correlation between local usage and experienced segregation for poorer, but not richer, urbanites, which suggests that 15-minute cities may also exacerbate the social isolation of marginalized communities.
Fracking, Toxics, and Disclosure
Robert Fetter
Duke University Working Paper, September 2022
Abstract:
This paper addresses the boundaries of firms' voluntary self-regulation in the context of information disclosure laws, a widely used regulatory approach that requires firms to disclose otherwise private information, reducing information asymmetries in the hopes that market mechanisms may then encourage a race to quality. Prior work suggests that mandatory disclosure laws improve outcomes for stakeholders, but virtually all extant empirical evidence is from settings where the information provided is relatively accessible to non-technical audiences, and most is from consumer-facing industries. I analyze the effect of mandatory disclosure on firms' choice of additives in hydraulic fracturing, a non-consumer-facing industry in which mandated information disclosures are relatively technical and difficult for non-experts to interpret. Exploiting differences in state-level regulatory timing to estimate a causal effect, and inferring pre-regulation toxic use from a combination of data recovered from a Right-To-Know information request and firms' own voluntary reporting, I find disclosure regulations caused a 68% to 84% decrease in toxic chemical use that persisted at least three years after the regulations. This demonstrates that disclosure affects firms' behavior through multiple channels and can change behavior even when consumer pressure is minimal and information is challenging or costly to interpret.
Heads Up: Does Air Pollution Cause Workplace Accidents?
Victor Lavy, Genia Rachkovski & Omry Yoresh
NBER Working Paper, December 2022
Abstract:
Literature has shown that air pollution can have short- and long-term adverse effects on physiological and cognitive performance, leading to adverse outcomes in the labor market. In this study, we estimate the effect of increased nitrogen dioxide (NO₂), one of the primary air pollutants, on the likelihood of accidents in construction sites, a significant factor related to productivity losses in the labor market. Using data from all construction sites and pollution monitoring stations in Israel, we find a strong and significant connection between air pollution and construction site accidents. We find that a 10-ppb increase in NO₂ levels increases the likelihood of an accident by as much as 25 percent. We observe strong nonlinear treatment effects, mainly driven by very high levels of NO₂. The probability of an accident is almost quadrupled when NO₂ levels cross into levels considered by the EPA as “unhealthy” (above the 99th percentile in our sample) compared to levels considered “clean” (below the 95th percentile in our sample). We also implement a set of instrumental variable analyses to support the causal interpretation of the results and present evidence suggestive of a mechanism where the effect of pollution is exacerbated in conditions with high cognitive strain or worker fatigue. Finally, we perform a cost-benefit analysis, supported by a nonparametric estimation and institutional information, which examines the viability of a potential welfare-improving policy to subsidize the closure of construction sites on highly polluted days.
Favourability towards natural gas relates to funding source of university energy centres
Douglas Almond, Xinming Du & Anna Papp
Nature Climate Change, December 2022, Pages 1122-1128
Abstract:
Methane is 28 to 86 times more potent as a driver of global warming than CO2. Global methane concentrations have increased at an accelerating rate since 2004, yet the role of fossil fuels and revitalized natural gas extraction and distribution in accelerating methane concentrations is poorly recognized. Here we examine the policy positioning of university-based energy centres towards natural gas, given their growing influence on climate discourse. We conducted sentiment analysis using a lexicon- and rule-based sentiment scoring tool on 1,168,194 sentences in 1,706 reports from 26 universities, some of which receive their primary funding from the natural gas industry. We found that fossil-funded centres are more favourable in their reports towards natural gas than towards renewable energy, and tweets are more favourable when they mention funders by name. Centres less dependent on fossil funding show a reversed pattern with more neutral sentiment towards gas, and favour solar and hydro power.
The Coal Transition and Its Implications for Health and Housing Values
Rebecca Fraenkel, Joshua Graff Zivin & Sam Krumholz
NBER Working Paper, December 2022
Abstract:
During the past fifteen years, more than 30% of US coal plants have had at least one coal-fired generator close. We utilize this natural experiment to estimate the effect of coal plant exposure on mortality and house values. Using a difference-in-differences design, we find that, despite the fact that most of this coal generation is replaced with natural gas generation, individuals in counties whose population centroid is within 30 miles of a plant that closes at least one coal-fired unit experience large health effects following shutdown. While these health improvements appear to capitalize into housing values, they only do so for homes within 15 miles of the plant and only when the retirement is complete rather than partial. Taken together, these results underscore the importance of subjective perceptions in shaping market-mediated price effects with far-reaching implications for the literature.
Dirty density: Air quality and the density of American cities
Felipe Carozzi & Sefi Roth
Journal of Environmental Economics and Management, forthcoming
Abstract:
We study the effect of urban density on the exposure of city dwellers to air pollution using data from the United States urban system. Exploiting geological features to instrument for density, we find an economically and statistically significant pollution-density elasticity of 0.13. We assess the health implications of these estimates and find that increased density in an average city leads to sizeable mortality costs. Our findings highlight the possible trade-off between reducing global greenhouse gas emissions, which is associated with denser cities according to prior empirical research, and preserving local air quality and human health within cities.