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Days of Haze: Environmental Information Disclosure and Intertemporal Avoidance Behavior

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  • Joshua Graff Zivin
  • Matthew Neidell

Abstract

In this paper, we investigate the dynamics of informational regulatory approaches by analyzing the impact of smog alerts issued on consecutive days on discretionary outdoor activities in Southern California. Short-run adjustments to transitory risk entail costs that are likely to influence the set of evasive actions pursued by those at risk. Our results confirm that the cost of intertemporally substituting activities is increasing over time: when alerts are issued on two successive days, any response on the first day has largely disappeared by the second day. Small reprieves from alerts, however, reset these costs. Our findings imply that a time-varying decision rule that accounts for multiple day air quality forecasts may improve social welfare.

Suggested Citation

  • Joshua Graff Zivin & Matthew Neidell, 2008. "Days of Haze: Environmental Information Disclosure and Intertemporal Avoidance Behavior," NBER Working Papers 14271, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:14271 Note: EEE HE
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    References listed on IDEAS

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    1. Shimshack, Jay P. & Ward, Michael B. & Beatty, Timothy K.M., 2007. "Mercury advisories: Information, education, and fish consumption," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 158-179, March.
    2. Smith, V Kerry & Johnson, F Reed, 1988. "How Do Risk Perceptions Respond to Information? The Case of Radon," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 1-8, February.
    3. Ginger Zhe Jin & Phillip Leslie, 2003. "The Effect of Information on Product Quality: Evidence from Restaurant Hygiene Grade Cards," The Quarterly Journal of Economics, Oxford University Press, vol. 118(2), pages 409-451.
    4. John Mullahy, 1999. "It'll only hurt a second? Microeconomic determinants of who gets flu shots," Health Economics, John Wiley & Sons, Ltd., vol. 8(1), pages 9-24.
    5. Tomas Philipson, 1996. "Private Vaccination and Public Health: An Empirical Examination for U.S. Measles," Journal of Human Resources, University of Wisconsin Press, vol. 31(3), pages 611-630.
    6. Lee, David S. & Card, David, 2008. "Regression discontinuity inference with specification error," Journal of Econometrics, Elsevier, vol. 142(2), pages 655-674, February.
    7. Avner Ahituv & V. Joseph Hotz & Tomas Philipson, 1996. "The Responsiveness of the Demand for Condoms to the Local Prevalence of AIDS," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 869-897.
    8. Matthew Neidell, 2009. "Information, Avoidance Behavior, and Health: The Effect of Ozone on Asthma Hospitalizations," Journal of Human Resources, University of Wisconsin Press, vol. 44(2).
    9. W. Kip Viscusi & Wesley A. Magat & Joel Huber, 1986. "Informational Regulation of Consumer Health Risks: An Empirical Evaluation of Hazard Warnings," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 351-365, Autumn.
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    More about this item

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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