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Environmental Concern and the Business Cycle: The Chilling Effect of Recession

Author

Listed:
  • Matthew E. Kahn
  • Matthew J. Kotchen

Abstract

This paper uses three different sources of data to investigate the association between the business cycle--measured with unemployment rates--and environmental concern. Building on recent research that finds internet search terms to be useful predictors of health epidemics and economic activity, we find that an increase in a state's unemployment rate decreases Google searches for "global warming" and increases searches for "unemployment," and that the effect differs according to a state's political ideology. From national surveys, we find that an increase in a state's unemployment rate is associated with a decrease in the probability that residents think global warming is happening and reduced support for the U.S to target policies intended to mitigate global warming. Finally, in California, we find that an increase in a county's unemployment rate is associated with a significant decrease in county residents choosing the environment as the most important policy issue. Beyond providing the first empirical estimates of macroeconomic effects on environmental concern, we discuss the results in terms of the potential impact on environmental policy and understanding the full cost of recessions.

Suggested Citation

  • Matthew E. Kahn & Matthew J. Kotchen, 2010. "Environmental Concern and the Business Cycle: The Chilling Effect of Recession," NBER Working Papers 16241, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:16241
    Note: EEE PE POL
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    File URL: http://www.nber.org/papers/w16241.pdf
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Google Trends Delivers a Verdict on Which Economist the Public Cares About
      by Matthew E. Kahn in Environmental and Urban Economics on 2011-09-10 09:31:00
    2. A Response to Fellow Climate Change Nerds
      by Matthew E. Kahn in Environmental and Urban Economics on 2010-12-29 03:18:00
    3. A Reply to a Smart Email About Rational Expectations and Climate Change Adaptation
      by Matthew E. Kahn in Environmental and Urban Economics on 2010-12-19 01:00:00
    4. The Causes and Consequences of Environmentalism
      by Matthew E. Kahn in Environmental and Urban Economics on 2010-08-25 06:03:00
    5. U.S High Carbon Exceptionalism
      by Matthew E. Kahn in the reality-based community on 2011-10-16 20:07:41
    6. The EPA’s Challenge and the Rock & Roll Granny
      by Matthew Kahn in the reality-based community on 2011-07-06 19:33:48
    7. Cap and Blame
      by Matthew Kahn in the reality-based community on 2011-04-21 20:47:21
    8. Behavioral Economics and Climate Change
      by Matthew E. Kahn in Legal Planet on 2012-04-09 05:03:20
    9. Theda Skocpol on Federal Carbon Policy Design
      by Matthew E. Kahn in Legal Planet on 2013-01-19 23:07:47
    10. Are Recessions Good for the Environment? Evidence from Greece
      by Matthew Kahn in Environmental and Urban Economics on 2014-01-03 06:31:00
    11. Google's Zeitgeist Update as of July 2015: Rising Interest in Gay Marriage and Declining Interest in Global Warming
      by Matthew Kahn in Environmental and Urban Economics on 2015-07-16 01:28:00

    Citations

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

    1. Parag A. Pathak & Alvin E. Roth, 2013. "Matching with Couples: Stability and Incentives in Large Markets," The Quarterly Journal of Economics, Oxford University Press, vol. 128(4), pages 1585-1632.
    2. Gary D. Libecap, 2014. "Addressing Global Environmental Externalities: Transaction Costs Considerations," Journal of Economic Literature, American Economic Association, vol. 52(2), pages 424-479, June.
    3. Chonnikarn Fern Jira & Michael W. Toffel, 2011. "Engaging Supply Chains in Climate Change," Harvard Business School Working Papers 12-026, Harvard Business School, revised Oct 2012.
    4. Turaga, Rama Mohana, 2015. "Does Economy Matter for Public Support for Environmental Protection? Evidence from India," IIMA Working Papers WP2015-03-40, Indian Institute of Management Ahmedabad, Research and Publication Department.
    5. A. Mantovani & C. Vergari, 2013. "Hedonic vs Environmental Quality: Which Policy Can Help in Lowering Pollution Emissions?," Working Papers wp906, Dipartimento Scienze Economiche, Universita' di Bologna.
    6. Robert Brulle & Jason Carmichael & J. Jenkins, 2012. "Shifting public opinion on climate change: an empirical assessment of factors influencing concern over climate change in the U.S., 2002–2010," Climatic Change, Springer, vol. 114(2), pages 169-188, September.
    7. Fankhauser, Sam & Gennaioli, Caterina & Collins, Murray, 2015. "The political economy of passing climate change legislation: evidence from a survey," LSE Research Online Documents on Economics 63352, London School of Economics and Political Science, LSE Library.
    8. Herrnstadt, Evan & Muehlegger, Erich, 2014. "Weather, salience of climate change and congressional voting," Journal of Environmental Economics and Management, Elsevier, vol. 68(3), pages 435-448.
    9. Bruegge, Chris & Carrión-Flores, Carmen & Pope, Jaren C., 2016. "Does the housing market value energy efficient homes? Evidence from the energy star program," Regional Science and Urban Economics, Elsevier, vol. 57(C), pages 63-76.
    10. Jacobsen, Grant D., 2013. "Do economic conditions influence environmental policy? Evidence from the US Senate," Economics Letters, Elsevier, vol. 120(2), pages 167-170.
    11. repec:eee:ecolec:v:140:y:2017:i:c:p:235-240 is not listed on IDEAS
    12. Shkarlet, Serhiy & Petrakov, Iaroslav, 2013. "Environmental Taxation Evolution in Ukraine: Trends, Challenges and Outlook," MPRA Paper 45168, University Library of Munich, Germany, revised 18 May 2013.
    13. Tefft, Nathan, 2011. "Insights on unemployment, unemployment insurance, and mental health," Journal of Health Economics, Elsevier, vol. 30(2), pages 258-264, March.
    14. Gary D. Libecap, 2013. "Addressing Global Environmental Externalities: Transaction Costs Considerations," NBER Working Papers 19501, National Bureau of Economic Research, Inc.
    15. repec:kap:enreec:v:68:y:2017:i:2:d:10.1007_s10640-016-0020-8 is not listed on IDEAS
    16. Nils Kok & Marquise McGraw & John Quigley, 2012. "The diffusion over time and space of energy efficiency in building," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(2), pages 541-564, April.

    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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