Does Air Quality Matter? Evidence from the Housing Market

This study exploits the quasi-random assignment of air pollution changes across counties induced by federally mandated air pollution regulations to identify the impact of particulate matter on property values. Two striking empirical regularities emerge from the analysis. First particulate matter declined substantially more in regulated than in unregulated counties during the 1970s and 1980s. At the same time, housing prices rose more in regulated counties. The evidence suggests that this approach identifies two causal effects: 1) the impact of regulation on air quality improvements, and 2) the impact of regulation on economic gains for home-owners. In addition, the results highlight the importance of choosing regulatory instruments that are orthogonal to unobserved housing price shocks that vary by county over long time horizons. It appears that using regulation-induced changes in particulate matter leads to more reliable estimates of the capitalization of air quality into property values. Whereas the conventional cross-sectional and unstable and indeterminate across specifications, the instrumental variables estimates are much larger, insensitive to specification of the model, and appear to purge the biases in the conventional estimates. The estimates imply that a one-unit reduction in suspended particulates results in a 0.7-1.5 percent increase in home values. In addition, it appears that air pollution regulations resulted in real economic benefits to home-owners in regulated counties.

Air Quality, Infant Mortality, and the Clean Air Act of 1970

We examine the effects of total suspended particulates (TSPs) air pollution on infant health using the air quality improvements induced by the 1970 Clean Air Act Amendments (CAAA). This legislation imposed strict regulations on industrial polluters in nonattainment' counties with TSPs concentrations exceeding the federal ceiling. We use nonattainment status as an instrumental variable for TSPs changes to estimate their impact on infant mortality changes in the first year that the 1970 CAAA was in force. TSPs nonattainment status is associated with sharp reductions in both TSPs pollution and infant mortality from 1971 to 1972. The greater reductions in nonattainment counties near the federal ceiling relative to the attainment' counties narrowly below the ceiling suggest that the regulations are the cause. We estimate that a one percent decline in TSPs results in a 0.5 percent decline in the infant mortality rate. Most of these effects are driven by a reduction in deaths occurring within one month of birth, suggesting that fetal exposure is a potential biological pathway. The results imply that roughly 1,300 fewer infants died in 1972 than would have in the absence of the Clean Air Act.

The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession

This study uses sharp, differential air quality changes across sites attributable to geographic variation in the effects of the 1981-82 recession to estimate the relationship between infant mortality and particulates air pollution. It is shown that in the narrow period of 1980-82, there was substantial variation across counties in changes in particulates pollution, and that these differential pollution reductions appear to be orthogonal to changes in a multitude of other factors that may be related to infant mortality. Using the most detailed and comprehensive data available, we find that a 1 mg/m3 reduction in particulates results in about 4-8 fewer infant deaths per 100,000 (a 0.35-0.45 elasticity). The estimated effects are driven almost entirely by fewer deaths occurring within one month and one day of birth, suggesting that fetal exposure to pollution has adverse health consequences. The estimated effects of the pollution reductions on infant birth weight provide evidence consistent with this potential pathophysiologic mechanism. The analysis also reveals a nonlinear relationship between pollution and infant mortality at the county level. Importantly, the estimates are remarkably stable across a variety of specifications. All of these findings are masked in conventional' analyses based on less credible research designs.

The Stairway to the Top: The Remuneration of Academic Executives

Australian universities have in recent times been undergoing a substantial transformation in the way in which they are managed. They have moved away from the (British-based) traditional collegiate model to one in which professional managers play a centre-stage role. This paper investigates an important element of the managerialism at Australian universities, the market for what we call “academic executives” (AEs). We analyse the remuneration of the top AEs at Australian universities over the past six years and show that institutional size is a dominant driving factor of remuneration, as has been found with compensation of CEOs in the private sector. We also find the pay-size elasticity to be about 0.25 and is the same for both the university and private sectors; and remarkably, this value has also been found in previous studies on executive remuneration for the US and the UK. The remuneration schedule for the university sector is about half as steep as that for the private sector, suggesting that it is a much harder climb to the top of the corporate ladder. We analyse the structure of remuneration among AEs and the Group of Eight universities are found to have a pay parity structure that is closest to that for the private sector.

Birth cohort and the black-white achievement gap: the role of health soon after birth

A large literature documents the significant gap in average test scores between blacks and whites, while a related literature finds a substantial narrowing of the gap during the 1980’s, and a stagnation in convergence during the 1990’s. We use two data sources the Long Term Trends NAEP and AFQT scores for the universe of applicants to the U.S. military between 1976 and 1991 to show that most of the racial convergence in the 1980’s is explained by relative improvements across successive cohorts of blacks born between 1963 and the early 1970’s and not by a secular narrowing in the gap over time. Furthermore, these across-cohort test score gains occurred almost exclusively among blacks in the South. We then examine the potential causes of these large composition effects in the test score gap and their significant variation across U.S. states. We demonstrate that the timing of the cohort-based AFQT convergence closely tracks the convergence in measures of black and white infant health for those cohorts. For example, the cohort- specific AFQT gaps (adjusted for age and year effects and selection into test taking) and the racial gaps in post- neonatal mortality rates deaths between one month and one year of birth exhibit very similar patterns across states and birth cohorts. We show that the black-white convergence in AFQT scores appears to have been more closely linked with post- neonatal mortality rates than with earlier health measures such as neonatal mortality (deaths within one month of birth) and low birthweight. We also find little evidence that other potential confounders (e.g., schooling desegregation, family background) can explain these patterns in AFQT scores. Investments in health at very early ages after birth appear to have large, long-term effects on human capital accumulation. We also discuss preliminary evidence that the staggered timing of hospital integration across the South is consistent with the patterns of gains in black test scores 17 to 18 years after birth more so than other hypotheses for progress in black infant health (e.g., Food Stamps, AFDC, Medicaid).Newborn infants - Mortality ; Racially mixed children

The Pay Parity Matrix A Toll For Analysing The Structure of Pay

This paper introduces a new tool for measuring relative pay within organisations, which we call the “pay parity (PP) matrix” and discusses its advantages and useful properties. The PP matrix allows us to conveniently measure, and draw inferences about, the nature of the whole remuneration schedule, such as its gradient and smoothness. We illustrate the application of the PP matrix by using data on the remuneration of academic executives. This tool has wider uses whenever matrix comparisons are involved.

High school students' summer jobs and their ensuing labour market achievement

This paper seeks to determine the effect of summer jobs offered by the public sector on high-school students’ labour market achievement by use of quasi-experimental data. Many municipalities in Sweden offer summer jobs within their organizations to high-school students. The municipality of Falun randomly allocates about 200 such summer jobs per year by a lottery. Because of this, the effect of a summer job might be determined while the issue of self-selection bias is controlled. Our study finds that summer jobs slightly improve the earnings immediately after graduation from high school, but the effect does not persist.intention-to-treat; on-treatment; Wilcoxon-Mann-Whitney test

The Central Role of Noise in Evaluating Interventions that Use Test Scores to Rank Schools

Several countries have implemented programs that use test scores to rank schools, and to reward or penalize them based on their students' average performance. Recently, Kane and Staiger (2002) have warned that imprecision in the measurement of school-level test scores could impede these efforts. There is little evidence, however, on how seriously noise hinders the evaluation of the impact of these interventions. We examine these issues in the context of Chile's P-900 program a country-wide intervention in which resources were allocated based on cutoffs in schools' mean test scores. We show that transitory noise in average scores and mean reversion lead conventional estimation approaches to greatly overstate the impacts of such programs. We then show how a regression discontinuity design that utilizes the discrete nature of the selection rule can be used to control for reversion biases. While the RD analysis provides convincing evidence that the P-900 program had significant effects on test score gains, these effects are much smaller than is widely believed.

TRUE STATE DEPENDENCE IN MONTHLY WELFARE PARTICIPATION:A NONEXPERIMENTAL ANALYSIS

This paper provides an empirical evaluation of true state dependence in welfare participation using unique administrative data from California that is measured at the monthly frequency, which coincides with the welfare eligibility period and so is free of time aggregation bias. The analysis uses first- and second-order dynamic conditional logit models that non-parametrically control for permanent unobserved heterogeneity to test for state dependence in welfare behavior. The second-order model also absorbs individual-specific first-order Markov chains, and provides a more robust test for state dependence in high frequency data. The results using the first-order model show substantial first-order state dependence in monthly welfare participation. Absorbing heterogeneous first-order effects, the hypothesis of no second-order state dependence is also easily rejected. This suggests that past welfare participation predicts future participation, given unrestricted effects of both the present state and unobserved heterogeneity, and provides substantive evidence of duration dependence at the individual level.Binary response panel data, state dependence, unobserved heterogeneity, initialconditions, conditional logit models