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When the Air Doesn't Move the Data: The Thermal Inversion Instrument in Developing Countries

Author

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  • Hiroyuki Yamada

    (Keio University)

Abstract

Thermal inversions have become the standard instrument for estimating the causal effect of air pollution, underpinning at least 81 published studies of health, labor, firm, and crime outcomes. Seventy-seven percent of those studies concern China, and none concerns Sub-Saharan Africa. This paper examines whether the design can be transported to the regions where pollution research is expanding fastest. We link 120,820 children in 26 Sub-Saharan African countries and 128,919 in India, Bangladesh, and Nepal to 0.01° satellite PM2.5 and to ERA5 temperature profiles measured at local dawn, and we estimate a single two-stage least squares specification six times, changing only the definition of the inversion instrument. Five of the six definitions come from published practice, and the sixth is an elevation-robust variant of our own. In the African sample, we find that all six first stages are strong and correctly signed (F=57-356). However, the second stages split by instrument family. Pressure-level definitions give positive but insignificant effects on child respiratory illness, whereas surface-layer definitions, the modal implementation in the literature, give significant negative ones. Over-identification tests reject the cross-family pairings of the count and continuous instruments (p

Suggested Citation

  • Hiroyuki Yamada, 2026. "When the Air Doesn't Move the Data: The Thermal Inversion Instrument in Developing Countries," Keio-IES Discussion Paper Series DP2026-018, Institute for Economics Studies, Keio University.
  • Handle: RePEc:keo:dpaper:dp2026-018
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    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation

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