Valuing Public Goods Using Happiness Data: The Case of Air Quality

This paper describes and implements a method for estimating the average marginal value of a time-varying local public good: air quality. It uses the General Social Survey (GSS), which asks thousands of people in various U.S. locations how happy they are, along with other demographic and attitude questions. These data are matched with the Environmental Protection Agency's Air Quality System (AQS) to find the level of pollution in those locations on the dates the survey questions were asked. People with higher incomes in any given year and location report higher levels of happiness, and people interviewed on days when air pollution was worse than the local seasonal average report lower levels of happiness. Combining these two concepts, I derive the average marginal rate of substitution between income and air quality – a compensating variation for air pollution.willingness to pay, stated well-being, pollution, compensating variation

Technology, International Trade, and Pollution from U.S. Manufacturing

Total pollution emitted by U.S. manufacturers declined over the past 30 years, while manufacturing output increased. This improvement must result from one of two trends: (1) change in production or abatement processes ("technology"); or (2) change in the mix of goods manufactured in the U.S, which itself may result from increased net imports of pollution-intensive goods ("international trade"). This paper first shows that most of the decline in pollution from U.S.manufacturing has been due to changing technology, rather than changes in the mix of goods produced, although the pace of that technological change has slowed over time. Second, the paper provides evidence that increases in net imports of pollution-intensive goods are too small to explain more than about half of the pollution reductions from the changing mix of goods produced in the U.S. Together, these two findings demonstrate that shifting polluting industries overseas has played at most a minor role in the cleanup of the U.S. manufacturing sector.International Trade, Pollution Haven, Industrial Flight

Technology, International Trade, and Pollution from U.S. Manufacturing

Total pollution emitted by U.S. manufacturers declined over the past 30 years by about 60 percent, even though real manufacturing output increased 70 percent. This improvement must result from a combination of two trends: (1) changes in production or abatement processes ("technology"); or (2) changes in the mix of goods manufactured in the United States, which itself may result from increased net imports of pollution-intensive goods ("international trade"). I first show that most of the decline in pollution from U.S. manufacturing has been the result of changing technology, rather than changes in the mix of goods produced, although the pace of that technology change has slowed over time. Second, I present evidence that increases in net imports of pollution-intensive goods are too small to explain more than about half of the pollution reductions from the changing mix of goods produced in the United States. Together, these two findings demonstrate that shifting polluting industries overseas has played at most a minor role in the cleanup of U.S. manufacturing.

Immigrants, Education, and Labor Market: A Perspective from Four States

immigration, education, labor market, workforce, population, Tennessee

It Is Time to Invest in Human Capital

Closing the educational attainment gap: How can southern middle Tennessee, experiencing significant economic decline, emerge as a globally competitive manufacturing region?Murat Arik, workforce, Tennessee, manufacturing, economic development, rural, training, education

Energy Use By Apartment Tenants When Landlords Pay For Utilities

Energy costs are included in the monthly rent of one fourth of U.S. apartment residents. Because these tenants do not face the marginal cost of their own energy use, they have little incentive to use energy efficiently. Explanations for this apparent market failure fall into two categories: the tenants value such arrangements more than they value the extra energy, or the landlords value the arrangements more than the cost of the extra energy. We use data from the U.S. Department of Energy's Residential Energy Consumption Survey and the Census Bureau's American Housing Survey to estimate energy consumption by tenants in utility-included apartments, and the rent premium for those apartments. While market rents for utility-included apartments are higher than for otherwise similar metered apartments, the difference is smaller than the cost of the energy used, a finding that supports landlord-side explanations for the persistence of these seemingly inefficient rental contracts.

Technology, International Trade, and Pollution from U.S. Manufacturing

Total pollution emitted by U.S. manufacturers declined over the past 30 years, even though manufacturing output increased. This improvement must result from one of two trends: (1) changes in production or abatement processes (“technology”); or (2) changes in the mix of goods manufactured in the United States, which itself may result from increased net imports of pollution-intensive goods (“international trade”). In this paper, I first show that most of the decline in pollution from U.S. manufacturing has been the result of changing technology instead of changes in the mix of goods produced, although the pace of that technology change has slowed over time. Second, I present evidence that increases in net imports of pollution-intensive goods are too small to explain more than about half of the pollution reductions from the changing mix of goods produced in the United States. Together, these two findings demonstrate that shifting polluting industries overseas has played at most a minor role in the cleanup of the U.S. manufacturing sector.pollution havens, trade and environment, pollution intensity

The Ups and Downs of the Environmental Kuznets Curve

By now the observation that some pollutants appear to increase and then decrease with economic development has become a widely accepted stylized fact. This paper argues that the fundamental insight of the empirical literature is merely that pollution does not necessarily increase with economic growth, and that the fundamental insight of the theoretical literature is that the observed inverse-U-shaped pollution-income relationship is neither necessary nor sufficient for Pareto-efficient environmental policies. Furthermore, the inverse-U-shaped path is not unique to environmental phenomenon, and may exist wherever a desirable good generates an undesirable side-effect. Finally, all of these points can be made without most of the econometric or theoretical mechanics that fill this literature.

Environmental Regulatory Competition: A Status Report and Some New Evident

Concerns about devolving environmental regulatory powers to lower levels of government permeate debates in the U.S. and Europe about the appropriate level of regulatory authority. In theory, given a long list of conditions, regulatory competition by local governments can be efficient in the same way that tax competition can be efficient: local welfare-maximizing governments set the same standards or taxes as would an omniscient welfare-maximizing central government. In practice, however, these conditions are improbable, especially in the case of environmental regulations, and local competition is potentially inefficient. In the past two years, evidence has begun to emerge regarding the empirical importance of these inefficiencies. In this paper, I describe this nascent literature, drawing parallels to the tax competition literature, suggest some avenues for empirical research, and present some new results.