IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp9884.html
   My bibliography  Save this paper

Canary in a Coal Mine: Infant Mortality, Property Values, and Tradeoffs Associated with Mid-20th Century Air Pollution

Author

Listed:
  • Clay, Karen

    () (Carnegie Mellon University)

  • Lewis, Joshua

    () (University of Montreal)

  • Severnini, Edson R.

    () (Carnegie Mellon University)

Abstract

Pollution is a common byproduct of economic activity. Although policymakers should account for both the benefits and the negative externalities of polluting activities, it is difficult to identify those who are harmed and those who benefit from them. To overcome this challenge, our paper uses a novel dataset on the mid-20th century expansion of the U.S. power grid to study the costs and the benefits of coal-fired electricity generation. The empirical analysis exploits the timing of coal-fired power plant openings and annual variation in plant-level coal consumption from 1938 to 1962, when emissions were virtually unregulated. Pollution from the burning of coal for electricity generation is shown to have quantitatively important and nonlinear effects on county-level infant mortality rates. By 1962, it was responsible for 3,500 infant deaths per year, over one death per thousand live births. These effects are even larger at lower levels of coal consumption. We also find evidence of clear tradeoffs associated with coal-fired electricity generation. For counties with low access to electricity in the baseline, increases in local power plant coal consumption reduced infant mortality and increased housing values and rental prices. For counties with near universal access to electricity in the baseline, increases in coal consumption by power plants led to higher infant mortality rates, and lower housing values and rental prices. These results highlight the importance of considering both the costs and benefits of polluting activities, and suggest that demand for policy intervention may emerge only when the negative externalities are significantly larger than the perceived benefits.

Suggested Citation

  • Clay, Karen & Lewis, Joshua & Severnini, Edson R., 2016. "Canary in a Coal Mine: Infant Mortality, Property Values, and Tradeoffs Associated with Mid-20th Century Air Pollution," IZA Discussion Papers 9884, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp9884
    as

    Download full text from publisher

    File URL: http://ftp.iza.org/dp9884.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Eva Arceo & Rema Hanna & Paulina Oliva, 2016. "Does the Effect of Pollution on Infant Mortality Differ Between Developing and Developed Countries? Evidence from Mexico City," Economic Journal, Royal Economic Society, vol. 126(591), pages 257-280, March.
    2. Dora L. Costa & Matthew E. Kahn, 2004. "Changes in the Value of Life, 1940--1980," Journal of Risk and Uncertainty, Springer, vol. 29(2), pages 159-180, September.
    3. 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.
    4. Molly Lipscomb & A. Mushfiq Mobarak & Tania Barham, 2013. "Development Effects of Electrification: Evidence from the Topographic Placement of Hydropower Plants in Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 5(2), pages 200-231, April.
    5. Janet Currie & Reed Walker, 2011. "Traffic Congestion and Infant Health: Evidence from E-ZPass," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 65-90, January.
    6. Kenneth Y. Chay & Michael Greenstone, 2003. "The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 1121-1167.
    7. W. Walker Hanlon, 2015. "Pollution and Mortality in the 19th Century," NBER Working Papers 21647, National Bureau of Economic Research, Inc.
    8. Hunt Allcott & Allan Collard-Wexler & Stephen D. O'Connell, 2016. "How Do Electricity Shortages Affect Industry? Evidence from India," American Economic Review, American Economic Association, vol. 106(3), pages 587-624, March.
    9. Janet Currie & Joshua Graff Zivin & Jamie Mullins & Matthew Neidell, 2014. "What Do We Know About Short- and Long-Term Effects of Early-Life Exposure to Pollution?," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 217-247, October.
    10. Joshua Graff Zivin & Matthew Neidell, 2012. "The Impact of Pollution on Worker Productivity," American Economic Review, American Economic Association, vol. 102(7), pages 3652-3673, December.
    11. 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.
    12. Banzhaf, H. Spencer & Farooque, Omar, 2013. "Interjurisdictional housing prices and spatial amenities: Which measures of housing prices reflect local public goods?," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 635-648.
    13. Janet Currie & Lucas Davis & Michael Greenstone & Reed Walker, 2015. "Environmental Health Risks and Housing Values: Evidence from 1,600 Toxic Plant Openings and Closings," American Economic Review, American Economic Association, vol. 105(2), pages 678-709, February.
    14. Barreca, Alan I. & Clay, Karen & Tarr, Joel, 2014. "Coal, Smoke, and Death: Bituminous Coal and American Home Heating," IZA Discussion Papers 7987, Institute for the Study of Labor (IZA).
    15. Carl Kitchens & Price Fishback, 2013. "Flip the Switch: The Spatial Impact of the Rural Electrification Administration 1935-1940," NBER Working Papers 19743, National Bureau of Economic Research, Inc.
    16. He, Jiaxiu & Liu, Haoming & Salvo, Alberto, 2015. "Severe Air Pollution and Labor Productivity: Evidence from Industrial Towns in China," IZA Discussion Papers 8916, Institute for the Study of Labor (IZA).
    17. W. Walker Hanlon & Yuan Tian, 2015. "Killer Cities: Past and Present," American Economic Review, American Economic Association, vol. 105(5), pages 570-575, May.
    18. Kitchens, Carl & Fishback, Price, 2015. "Flip the Switch: The Impact of the Rural Electrification Administration 1935–1940," The Journal of Economic History, Cambridge University Press, vol. 75(04), pages 1161-1195, December.
    19. W. Walker Hanlon, 2016. "Coal Smoke and the Costs of the Industrial Revolution," NBER Working Papers 22921, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ball, Alastair, 2014. "Air pollution, foetal mortality, and long-term health: Evidence from the Great London Smog," MPRA Paper 63229, University Library of Munich, Germany, revised 25 Mar 2015.
    2. David S. Jacks & Krishna Pendakur & Hitoshi Shigeoka, 2017. "Infant Mortality and the Repeal of Federal Prohibition," Working Papers 2017-036, Human Capital and Economic Opportunity Working Group.
    3. Kyle C. Meng, 2016. "Estimating Path Dependence in Energy Transitions," NBER Working Papers 22536, National Bureau of Economic Research, Inc.
    4. Stephan Heblich & Alex Trew & Yanos Zylberberg, 2016. "East Side Story: Historical Pollution and Persistent Neighborhood Sorting," CESifo Working Paper Series 6166, CESifo Group Munich.
    5. Lewis, Joshua & Severnini, Edson R., 2017. "Short- and Long-Run Impacts of Rural Electrification: Evidence from the Historical Rollout of the U.S. Power Grid," IZA Discussion Papers 11243, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    mid-20th century air pollution; coal-fired electricity generation; infant mortality; housing values; tradeoffs;

    JEL classification:

    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-
    • N52 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - U.S.; Canada: 1913-
    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-
    • N92 - Economic History - - Regional and Urban History - - - U.S.; Canada: 1913-
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp9884. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak). General contact details of provider: http://www.iza.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.