Kevin Lewis

September 12, 2018

Hazed and Confused: The Effect of Air Pollution on Dementia
Kelly Bishop, Jonathan Ketcham & Nicolai Kuminoff
NBER Working Paper, August 2018


We test whether long-term exposure to air pollution degrades human capital by causing dementia. We link fifteen years of Medicare records for 6.9 million adults age 65 and older to the EPA’s air quality monitoring network and track the evolution of individuals’ health, onset of dementia, financial decisions, and cumulative residential exposure to fine-particulate air pollution (PM2.5). Our instrumental variables framework capitalizes on quasi-random variation in pollution exposure due to the EPA’s 2005 designation of nonattainment counties for PM2.5. We find that a 1 microgram-per-cubic-meter increase in average decadal exposure (9.1% of the mean) increases the probability of receiving a dementia diagnosis by 1.3 percentage points (6.7% of the mean). This finding is consistent with hypotheses from the medical literature. We conclude that regulation of air pollution has greater benefits than previously known, in part because dementia impairs financial decision making. We estimate that the dementia-related benefits of the EPA’s county nonattainment designations exceeded $150 billion. We also find that the effect of PM2.5 on dementia persists below current regulatory thresholds.

Local Environmental Quality and Interjurisdictional Spillovers
John William Hatfield & Katrina Kosec
Economica, forthcoming 


We investigate how the quality of environmental public goods varies with the number of local governments, and show how this relationship depends on the existence of spillovers across jurisdictions. Exploiting exogenous variation in the natural topography of the USA, we show that metropolitan areas with more local governments have significantly lower air quality and significantly higher concentrations of toxic air pollutants that cause cancer and respiratory disease. By contrast, drinking water quality — a public good with relatively few spillovers — does not vary with the number of governments. Further, we find that areas with more local governments tend to have a higher density of employment in heavily polluting industries like electric power generation and chemical manufacturing, even after controlling for population density. This is consistent with jurisdictional fragmentation leading to the presence of more polluting industries.

Why Milk Consumption is the Bigger Problem: Ethical Implications and Deaths per Calorie Created of Milk Compared to Meat Production
Karin Kolbe
Journal of Agricultural and Environmental Ethics, August 2018, Pages 467–481 


Pictures of sides of beef, hanging from overhead rails in refrigerated warehouses and meat-processing plants, often leave a feeling of unease. These pictures provoke the notion that human beings have no right to inflict suffering and death on other sentient beings for the sole purpose of providing food. However, the ethical analysis conducted in this study shows that meat production, if animal welfare and deaths per calorie created are considered, is less of a pressing problem compared to the production of milk. While meat can be provided with minimal suffering to animals, the consumption of milk is always associated with considerable suffering during the dairy cow’s life-span and the lives of their offspring. Moreover, more bovine deaths per unit of calorific value created are associated with milk production compared to meat production. The vegan movement, which is currently growing, wishes to minimise farm animal suffering as much as possible. However, if a vegan diet is not possible, consumers should make an informed decision about the products they consume. Replacement of the calories obtained from meat with those from milk and dairy products is not rational if animal welfare is considered.

Effects of ambient air pollution on incident Parkinson’s disease in Ontario, 2001 to 2013: A population-based cohort study
Saeha Shin et al.
International Journal of Epidemiology, forthcoming

Background: Despite recent studies linking air pollution to neurodegenerative illness, evidence relating air pollution and Parkinson’s disease (PD) remains scarce. We conducted a population-based cohort study in Ontario, Canada, to determine the association between air pollution and incident PD.

Methods: Using health administrative databases, we identified all adults aged 55–85 years, free of PD, and who lived in Ontario on 1 April 2001 (∼2.2 million). Individuals were followed up until 31 March 2013. We derived long-term average exposures to fine particulate matter (particles ≤2.5 µm in diameter, or PM2.5), nitrogen dioxide (NO2) and ozone from satellite-based estimates, land-use regression models and optimal interpolation methods, respectively. Using 2-year lags in exposures, we linked these estimates to individuals’ annual postal codes from 1994 (7 years before cohort inception). We applied spatial random-effects Cox proportional hazards models, adjusting for individual- and area-level characteristics. We also performed sensitivity analyses, such as considering longer lags in exposures and stratifying by selected characteristics.

Results: During the study period, we identified 38 745 newly diagnosed cases of PD. Each interquartile increment (3.8 µg/m3) of PM2.5 was associated with a 4% increase in incident PD (95% confidence interval, 1.01–1.08) after adjusting for various covariates. We also found positive associations for NO2 and ozone [hazard ratios (HRs) ranged from 1.03 to 1.04]. The associations for all exposures were unaltered with various sensitivity analyses except for considering longer lags, which somewhat attenuated the estimates, particularly for NO2 and ozone.

Conclusions: Exposure to air pollution, especially PM2.5, was found to be related to incident PD.

Light Pollution, Sleep Deprivation, and Infant Health at Birth
Laura Argys, Susan Averett & Muzhe Yang
University of Colorado Working Paper, July 2018


This is the first study that uses a direct measure of skyglow, an important aspect of light pollution, to examine its impact on infant health at birth. We find evidence of reduced birth weight, shortened gestational length and even preterm births. Specifically, increased nighttime brightness, characterized by being able to see only one-third to one-fourth of the stars that are visible in the absence of artificial light, is associated with an increase in the likelihood of a preterm birth by as much as 12.8 percent, or an increase of approximately 45,000 preterm births nationwide annually. Our findings add to the literature on the impact of in utero and early-life exposure to pollution, which thus far has focused primarily on air pollution. The unique feature of our identification strategy to determine a causal effect is the application of Walker's Law in physics, which provides a scientific basis to estimate skyglow. We use estimated skyglow as an instrumental variable to address the endogeneity problem associated with the skyglow variable. In addition, our study shows that increased skyglow is associated with less sleep, indicating a likely biological mechanism that links sleep deprivation to light-pollution induced circadian disruption. This result, combined with the literature on the adverse effects of sleep disorders, completes the causal chain underlying our finding on the adverse health impact of skyglow. Our study has important policy implications for current installation of LED streetlights in many U.S. municipalities, highlighting the necessity of minimizing skyglow contributed by streetlights.

Is it still economic to build a new coal-fired power plant in the U.S.? A real option analysis
Sang Baum Kang, Pascal Létourneau & Steven Sala
Applied Economics Letters, forthcoming


In the U.S., virtually no new coal-fired power plants have been built in recent years. Both industry experts and academics seem to believe that no rational firm will build a new coal-fired plant. Will such a trend continue in the future? To provide insights into this question, we investigate the optimal decision of an electricity company with an irreversible and deferrable opportunity to build either a new coal-fired or natural gas-fired power plant as its new base-load resource. According to our real option analysis, the optimal decision depends on the location. In the case of the eastern U.S., it is optimal to choose a natural gas plant if a firm is given a choice among a new natural gas plant, a new coal plant and deferring the investment. However, contrary to the common sentiment in the industry and academia, building a new coal plant in the western U.S. is still more economical than building a new natural gas plant in the absence of emission pricing. Furthermore, introducing carbon pricing to western U.S. states, as California did, can substantially increase the probability that a firm will optimally choose a natural gas plant over a coal plant.

Monetary Penalties and Noncompliance with Environmental Laws: A Mediation Analysis
Kimberly Barrett et al.
American Journal of Criminal Justice, September 2018, Pages 530–550


Studies that assess the impact of monetary penalties on environmental compliance have yielded mixed results. While some studies suggest fines deter future violations other studies find that fines do little to encourage compliance. This longitudinal study examines the impact of the dollar amount of fines on compliance with environmental laws among major facilities in the state of Michigan (n = 37). Results from a mediation analysis suggest that while noncompliance may slightly decrease immediately following a fine there are few changes to a firm’s long term compliance behavior. Furthermore, analyses of these data suggest that total fines levied prior to the most recent fine actually have a positive relationship with noncompliance. We suggest these results imply a decaying effect of deterrence that is perhaps connected to the organizational structure of the treadmill of production.

Can Small Incentives Have Large Effects? The Impact of Taxes versus Bonuses on Disposable Bag Use
Tatiana Homonoff
American Economic Journal: Economic Policy, forthcoming


This paper examines a simple element of financial incentive design -- whether the incentive takes the form of a fee for bad behavior or a reward for good behavior -- to determine if the framing of the incentive influences the policy's effectiveness. I investigate the effect of two similar policies aimed at reducing disposable bag use and a five-cent tax on disposable bag use and a five-cent bonus for reusable bag use. While the tax decreased disposable bag use by over forty percentage points, the bonus generated virtually no effect on behavior. These results are consistent with a model of loss aversion.

Effect of Greening Vacant Land on Mental Health of Community-Dwelling Adults: A Cluster Randomized Trial
Eugenia South et al.
JAMA Network Open, July 2018

Design, Setting, and Participants: This citywide cluster randomized trial examined 442 community-dwelling sampled adults living in Philadelphia, Pennsylvania, within 110 vacant lot clusters randomly assigned to 3 study groups. Participants were followed up for 18 months preintervention and postintervention. This trial was conducted from October 1, 2011, to November 30, 2014. Data were analyzed from July 1, 2015, to April 16, 2017.

Interventions: The greening intervention involved removing trash, grading the land, planting new grass and a small number of trees, installing a low wooden perimeter fence, and performing regular monthly maintenance. The trash cleanup intervention involved removal of trash, limited grass mowing where possible, and regular monthly maintenance. The control group received no intervention.

Results: A total of 110 clusters containing 541 vacant lots were enrolled in the trial and randomly allocated to the following 1 of 3 study groups: the greening intervention (37 clusters [33.6%]), the trash cleanup intervention (36 clusters [32.7%]), or no intervention (37 clusters [33.6%]). Of the 442 participants, the mean (SD) age was 44.6 (15.1) years, 264 (59.7%) were female, and 194 (43.9%) had a family income less than $25 000. A total of 342 participants (77.4%) had follow-up data and were included in the analysis. Of these, 117 (34.2%) received the greening intervention, 107 (31.3%) the trash cleanup intervention, and 118 (34.5%) no intervention. Intention-to-treat analysis of the greening intervention compared with no intervention demonstrated a significant decrease in participants who were feeling depressed (−41.5%; 95% CI, −63.6% to −5.9%; P = .03) and worthless (−50.9%; 95% CI, −74.7% to −4.7%; P = .04), as well as a nonsignificant reduction in overall self-reported poor mental health (−62.8%; 95% CI, −86.2% to 0.4%; P = .051). For participants living in neighborhoods below the poverty line, the greening intervention demonstrated a significant decrease in feeling depressed (−68.7%; 95% CI, −86.5% to −27.5%; P = .007). Intention-to-treat analysis of those living near the trash cleanup intervention compared with no intervention showed no significant changes in self-reported poor mental health.

Robust relationship between air quality and infant mortality in Africa
Sam Heft-Neal et al.
Nature, July 2018, Pages 254-258


Poor air quality is thought to be an important mortality risk factor globally, but there is little direct evidence from the developing world on how mortality risk varies with changing exposure to ambient particulate matter. Current global estimates apply exposure–response relationships that have been derived mostly from wealthy, mid-latitude countries to spatial population data, and these estimates remain unvalidated across large portions of the globe. Here we combine household survey-based information on the location and timing of nearly 1 million births across sub-Saharan Africa with satellite-based estimates of exposure to ambient respirable particulate matter with an aerodynamic diameter less than 2.5 μm (PM2.5) to estimate the impact of air quality on mortality rates among infants in Africa. We find that a 10 μg m−3 increase in PM2.5 concentration is associated with a 9% (95% confidence interval, 4–14%) rise in infant mortality across the dataset. This effect has not declined over the last 15 years and does not diminish with higher levels of household wealth. Our estimates suggest that PM2.5 concentrations above minimum exposure levels were responsible for 22% (95% confidence interval, 9–35%) of infant deaths in our 30 study countries and led to 449,000 (95% confidence interval, 194,000–709,000) additional deaths of infants in 2015, an estimate that is more than three times higher than existing estimates that attribute death of infants to poor air quality for these countries. Upward revision of disease-burden estimates in the studied countries in Africa alone would result in a doubling of current estimates of global deaths of infants that are associated with air pollution, and modest reductions in African PM2.5 exposures are predicted to have health benefits to infants that are larger than most known health interventions.

Environmental performance and analyst information processing costs
Paul Griffin, Thaddeus Neururer & Estelle Sun
Journal of Corporate Finance, forthcoming


This study tests whether the information processing costs of analysts vary positively with the environmental performance information available on the firms they follow. Consistent with this conjecture, we find that these costs increase when analysts process a wider array of environmental performance ratings. Specifically  we find that as the number of environmental performance ratings increases, analysts cover fewer firms in their portfolio, provide fewer earnings-per-share (EPS) forecast revisions, and make less timely forecast revisions. Two additional tests confirm that our results relate to environmental performance information and not to confounding factors. First, the “shock” of the Global Warming Solutions Act of 2006 implemented for California firms in 2012 increases analyst information processing costs incremental to the main effect of environmental performance ratings. Second, analyst information processing costs increase further in the year a firm covered by an analyst provides a CSR report for the first time. Our results have implications for firm managers considering voluntary environmental disclosure and investors deciding on what stocks to include in their socially responsible portfolios because when processing costs are high, analysts will provide less information or less timely information, resulting in more gradual price discovery in capital markets.


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