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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
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    References listed on IDEAS

    as
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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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