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Clean Identification? The Effects of the Clean Air Act on Air Pollution, Exposure Disparities, and House Prices

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  • Lutz Sager
  • Gregor Singer

Abstract

We assess the US Clean Air Act standards for fine particulate matter (PM2.5). Using high-resolution data, we find that the 2005 regulation reduced PM2.5 levels by 0.4 μg/ m3 over five years, with larger effects in more polluted areas. Standard difference-in-differences overstates these effects by a factor of three because time trends differ by baseline pollution, a bias we overcome with three alternative approaches. We show that the regulation contributed to narrowing Urban-Rural and Black-White PM2.5 exposure disparities, but less than difference-in-differences suggest. Pollution damages capitalized into house prices, however, appear larger than previously thought when leveraging regulatory variation.

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  • Lutz Sager & Gregor Singer, 2025. "Clean Identification? The Effects of the Clean Air Act on Air Pollution, Exposure Disparities, and House Prices," American Economic Journal: Economic Policy, American Economic Association, vol. 17(1), pages 1-36, February.
    • Handle: RePEc:aea:aejpol:v:17:y:2025:i:1:p:1-36
    DOI: 10.1257/pol.20220745
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    Cited by:

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    2. Gong, Da & Shang, Zhuocheng & Su, Yaqin & Yan, Andong & Zhang, Qi, 2024. "Economic impacts of China's zero-COVID policies," China Economic Review, Elsevier, vol. 83(C).

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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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