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Who Benefits from Environmental Regulation? Evidence from the Clean Air Act Amendments

Author

Listed:
  • Antonio Bento

    (University of Southern California and NBER)

  • Matthew Freedman

    (Drexel University)

  • Corey Lang

    (University of Rhode Island)

Abstract

Using geographically disaggregated data and exploiting an instrumental variable strategy, we show that contrary to conventional wisdom, the benefits of the 1990 Clean Air Act Amendments (CAAA) were progressive. The CAAA created incentives for local regulators to target the initially dirtiest areas for cleanup, creating heterogeneity in the incidence of air quality improvements that favored lower-income households. Based on house price appreciation, households in the lowest quintile of the income distribution received annual benefits from the program equal to 0.3 percent of their income on average during the 1990s, over twice as much as those in the highest quintile.

Suggested Citation

  • Antonio Bento & Matthew Freedman & Corey Lang, 2015. "Who Benefits from Environmental Regulation? Evidence from the Clean Air Act Amendments," The Review of Economics and Statistics, MIT Press, vol. 97(3), pages 610-622, July.
    • Handle: RePEc:tpr:restat:v:97:y:2015:i:2:p:610-622
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    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00493
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    More about this item

    Keywords

    environmental regulation; clean air act; clean air act amendments; CAAA; low income households; cleanup;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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