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Measuring the Effects of Environmental Regulations: The Critical Importance of a Spatially Disaggregated Analysis

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  • Auffhammer, Maximilian
  • Bento, Antonio M.
  • Lowe, Scott E.

Abstract

We examine the effects of the 1990 Clean Air Act Amendments (CAAA) on ambient concentrations of PM10 in the United States between 1990 and 2005. Consistent with prior literature, we find that non-attainment designation has no effect on the average monitor in non-attainment counties, after controlling for weather, socioeconomic characteristics at the county level and lagged concentrations. In sharp contrast, if we allow for heterogeneous treatment by type of monitor and county, we do find that the 1990 CAAA produced substantial effects. Our estimation results suggest that non-attainment counties with single monitors experienced a drop in concentrations of 10.5% relative to attainment counties. In non-attainment counties with multiple monitors, the overall effect of the regulation is an increase of ambient PM10 concentrations by 1.9%. The dirtiest monitors in these counties, however, experienced drops in PM10 of 6.1%, which suggest that regulators focus their attention on the dirtiest monitors.

Suggested Citation

  • Auffhammer, Maximilian & Bento, Antonio M. & Lowe, Scott E., 2007. "Measuring the Effects of Environmental Regulations: The Critical Importance of a Spatially Disaggregated Analysis," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt8d12x8pp, Department of Agricultural & Resource Economics, UC Berkeley.
  • Handle: RePEc:cdl:agrebk:qt8d12x8pp
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    References listed on IDEAS

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    1. Henderson, J Vernon, 1996. "Effects of Air Quality Regulation," American Economic Review, American Economic Association, vol. 86(4), pages 789-813, September.
    2. Daniel L. Millimet & John A. List & Thanasis Stengos, 2003. "The Environmental Kuznets Curve: Real Progress or Misspecified Models?," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 1038-1047, November.
    3. Greenstone, Michael, 2004. "Did the Clean Air Act cause the remarkable decline in sulfur dioxide concentrations?," Journal of Environmental Economics and Management, Elsevier, vol. 47(3), pages 585-611, May.
    4. Janet Currie & Matthew Neidell, 2005. "Air Pollution and Infant Health: What Can We Learn from California's Recent Experience?," The Quarterly Journal of Economics, Oxford University Press, vol. 120(3), pages 1003-1030.
    5. Kenneth Y. Chay & Michael Greenstone, 2003. "Air Quality, Infant Mortality, and the Clean Air Act of 1970," Working Papers 0406, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
    6. Kenneth Y. Chay & Michael Greenstone, 2005. "Does Air Quality Matter? Evidence from the Housing Market," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 376-424, April.
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    Cited by:

    1. Richard T. Carson, 2010. "The Environmental Kuznets Curve: Seeking Empirical Regularity and Theoretical Structure," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(1), pages 3-23, Winter.
    2. Carson, Richard T, 2009. "Searching for Empirical Regularity and Theoretical Structure: The Environmental Kuznets Curve," University of California at San Diego, Economics Working Paper Series qt4m6263c2, Department of Economics, UC San Diego.

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    More about this item

    Keywords

    Air Pollution; Clean Air Act; Spatial Modeling;
    All these keywords.

    JEL classification:

    • 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

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