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.

An Empirical Analysis of Black Economic Progress Over Time: Dissertation Summary

Although there is a consensus that there has been a dramatic improvement in the economic position of black Americans since the dismal prognosis of Gunnar Myrdal in An American Dilemma 50 years ago, there is little consensus on the magnitude of these gains, their underlying causes, and whether racial parity has been reached. My dissertation empirically examines the evolution of the economic status of blacks in the U.S. labor market over the last 40 years

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

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

The Costs of Low Birth Weight

Birth weight has emerged as the leading indicator of infant health and welfare and the central focus of infant health policy. This is because low birth weight (LBW) infants experience severe health and developmental difficulties that can impose enormous costs on society. But would the prevention of LBW generate equally sizable cost savings and health improvements? Estimates of the return to LBW-prevention from cross-sectional associations may be biased by omitted variables that cannot be influenced by policy, such as genetic factors. To address this, we compare the hospital costs, health at birth, and infant mortality rates between heavier and lighter infants from all twin pairs born in the United States. We also examine the effect of maternal smoking during pregnancy the leading risk factor for LBW in the United States on health among singleton births after controlling for detailed background characteristics. Both analyses imply substantially smaller effects of LBW than previously thought, suggesting two possibilities: 1) existing estimates overstate the true costs and consequences of LBW by at least a factor of four and by as much as a factor of 20; or 2) different LBW-preventing interventions have different health and cost consequences, implying that policy efforts that presume a single return to reducing LBW will necessarily be suboptimal.

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.

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

Birth Cohort and the Black-White Achievement Gap: The Roles of Access and Health Soon After Birth

One literature documents a significant, black-white gap in average test scores, while another finds a substantial narrowing of the gap during the 1980's, and stagnation in convergence after. 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: 1) the 1980's convergence is due to relative improvements across successive cohorts of blacks born between 1963 and the early 1970's and not a secular narrowing in the gap over time; and 2) the across-cohort gains were concentrated among blacks in the South. We then demonstrate that the timing and variation across states in the AFQT convergence closely tracks racial convergence in measures of health and hospital access in the years immediately following birth. We show that the AFQT convergence is highly correlated with post-neonatal mortality rates and not with neonatal mortality and low birth weight rates, and that this result cannot be explained by schooling desegregation and changes in family background. We conclude that investments in health through increased access at very early ages have large, long-term effects on achievement, and that the integration of hospitals during the 1960's affected the test performance of black teenagers in the 1980's.