Research

A large literature uses nonattainment status under the U.S. Clean Air Act (CAA) to measure regulatory stringency and to instrument for air pollution in studies of the impact of the CAA on health and other endpoints. Since 1978 U.S. Environmental Protection Agency (EPA) has regulated ambient air quality at the county level; however, prior to 1978 nonattainment status was imposed on Air Quality Control Regions, contiguous counties that comprise an airshed. This is not the definition of nonattainment used in the literature. Using county-level data, we examine the impacts of EPA’s definition of nonattainment status for TSP, CO, ozone, and SO2 in 1972 on ambient air quality and manufacturing employment between 1969 and 1976 and EPA’s definition of nonattainment in 1978 on air quality and manufacturing employment between 1975 and 1988.Nonattainment status in 1972 had no significant impact on either ambient TSP or on the ratio of dirty manufacturing to total employment between 1969 and 1976. We do, however, find significant impacts on ambient TSP using 1978 nonattainment status, and significant impacts of TSP, CO, ozone and SO2 nonattainment in 1978 on the fraction of employment in dirty manufacturing industries from 1975 to 1988. We discuss the implications of these findings for EPA’s decision regarding the geographic level at which to regulate air pollution.

Keywords: Air Pollution, Clean Air Act, Manufacturing Employment

We study the effect of a supply shock that affected some firms in the US airline industry. We examine how the firms adapted to the shock and the associated impact on emissions. Our setting is the grounding of all Boeing 737 MAX planes following two fatal accidents. We find a reduction in the number of flights, which reduces emissions, but airlines also reallocate planes across their network in a way that increases emissions in some locations due to changes in the plane mix. Airlines use their remaining aircraft more intensively, but do not add new planes to their fleets.

Keywords: Airline Industry, Supply Shock, Airline Accidents, Air Pollution

We examine the impact of mergers involving maverick firms on pricing, specifically focusing on the American and US Airways merger. We document substantial increases in connecting flight prices offered by nonmerging carriers on routes where US Airways previously held a dominant position. This surge occurred after the merger eliminated Advantage Fares, a price discounting program from US Airways. These pricing patterns may be attributed to the coordinated effects of the merger, as we eliminate several alternative explanations. Our theoretical analysis demonstrates that changes in the cost structure induced by the merger can explain the incentive for collusion among nonmerging carriers.

Keywords: Airline Industry, Merger Analysis, Coordinated Effects

Asset divestitures are often negotiated to alleviate anticompetitive concerns created by horizontal mergers. I develop a structural model to evaluate the effectiveness of alternative slot divestiture schemes in the US airline industry, focusing on the divestiture of slots at Ronald Reagan Washington National Airport (DCA), which the government required as a condition of the American/US Airways merger. Departing from the existing literature, my model accounts for how the number of slots allocated to a route segment affects carrier costs, how passengers going to many different destinations may use the same segments, and how carriers choose to allocate slots to segments. I use counterfactuals to show that slot divestitures can result in the re-allocation of surplus between consumers; to estimate the proportion of slots that the merged American would have needed to divest to maximize total welfare; and, to evaluate the effects of allocating divested slots to different types of carriers. I find that the proposed divestiture raised consumer surplus significantly ($112M per year) compared to approving the merger without divestiture, but that it re-allocated surplus between consumers in different markets. I also find that the policy of only allowing the slots to be divested to low-cost carriers raised consumer surplus relative to the policy of only allowing the slots to be divested to legacy carriers.

Keywords: Airline Industry, Merger Analysis, Cross Market Interaction

More than 16,000 chemicals are incorporated into plastics to impart properties such as color, flexibility, and durability. These chemicals may leach from plastics, resulting in widespread human exposure during everyday use. Two plastic-associated chemicals—bisphenol A (BPA) and di(2-ethylhexyl) phthalate (DEHP)—and a class of chemicals—brominated flame retardants [polybrominated diphenyl ethers (PBDEs)]—are credibly linked to adverse health and cognitive impacts. BPA exposures are associated with ischemic heart disease (IHD) and stroke, DEHP exposure with increased all-cause mortality among persons 55 to 64 y old, and prenatal PBDE exposures in mothers with IQ losses in their children. We estimate BPA, DEHP, and PBDE exposures in 38 countries containing one-third of the world’s population. We find that in 2015, 5.4 million cases of IHD and 346,000 cases of stroke were associated with BPA exposure; that DEHP exposures were linked to approximately 164,000 deaths among 55-to-64 y olds; and that 11.7 million IQ points were lost due to maternal PBDE exposure. We estimate the costs of these health impacts to be $1.5 trillion 2015 purchasing power parity dollars. If exposures to BPA and DEHP in the United States had been at 2015 levels since 2003, 515,000 fewer deaths would have been attributed to BPA and DEHP between 2003 and 2015. If PBDE levels in mothers had been at 2015 levels since 2005, over 42 million IQ points would have been saved between 2005 and 2015.

Keywords: Plastics, Health Effects

We examine whether counties designated as out of attainment with the National Ambient Air Quality Standards (NAAQS) under the 1970 Clean Air Act (CAA) experienced larger reductions in Total Suspended Particulates (TSP) during the 1970s than attainment counties. We answer this question using the official designation of nonattainment status which, between 1972 and 1978, was by Air Quality Control Region (AQCR). Data from balanced panels of TSP monitors in operation from 1969–78 and from 1971–78 are used to examine the impact of nonattainment status on TSP. We also examine the impact of nonattainment on TSP using the definition in the literature, which designates a county as out of attainment if any of its monitors violated the NAAQS. Using the official (AQCR) nonattainment designation, TSP, on average, fell by 10.2 μg/m3 using the 1969 panel and 9.1 μg/m3 using the 1971 panel. Using the definition of nonattainment in the literature yields smaller reductions: 6.0 μg/m3 using the 1969-78 panel and 7.7 μg/m3 using the 1971-78 panel. Using the correct definition of non-attainment in difference-in-differences (DID) models calls into question whether these results can be interpreted as causal. When counties are characterized using the official nonattainment designation, the parallel trends assumption, crucial to causal inference in the DID context, is violated.

Keywords: Air Pollution, Clean Air Act

Plastics have conveyed great benefits to humanity and made possible some of the most significant advances of modern civilization in fields as diverse as medicine, electronics, aerospace, construction, food packaging, and sports. It is now clear, however, that plastics are also responsible for significant harms to human health, the economy, and the earth’s environment. These harms occur at every stage of the plastic life cycle, from extraction of the coal, oil, and gas that are its main feedstocks through to ultimate disposal into the environment. The extent of these harms not been systematically assessed, their magnitude not fully quantified, and their economic costs not comprehensively counted.

Keywords: Plastic, Health Effects

We estimate a model of airline route competition in which carriers first choose whether to offer nonstop or connecting service and then choose prices. Carriers have full information about quality and marginal cost unobservables throughout the game, so that carriers choosing nonstop service will be selected. Accounting for selection when performing counterfactuals affects predictions about post-merger repositioning by rivals, likely price increases and the effectiveness of remedies, and allows the model to match observed changes after completed mergers.

Keywords: Airline Industry, Merger Analysis, Entry Model

Africa is undergoing both an environmental and an epidemiological transition. Household air pollution is the predominant form of air pollution, but it is declining, whereas ambient air pollution is increasing. We aimed to quantify how air pollution is affecting health, human capital, and the economy across Africa, with a particular focus on Ethiopia, Ghana, and Rwanda.

Keywords: Air Pollution, Health Effects, Africa

We examine the health implications of electricity generation from the 2018 stock of coal-fired power plants in India, as well as the health impacts of the expansion in coal-fired generation capacity expected to occur by 2030. We estimate emissions of SO2, NOX, and particulate matter 2.5 μm (PM2.5) for each plant and use a chemical transport model to estimate the impact of power plant emissions on ambient PM2.5. Concentration-response functions from the 2019 Global Burden of Disease (GBD) are used to project the impacts of changes in PM2.5 on mortality. Current plus planned plants will contribute, on average, 13% of ambient PM2.5 in India. This reflects large absolute contributions to PM2.5 in central India and parts of the Indo-Gangetic plain (up to 20 μg/m3). In the south of India, coal-fired power plants account for 20–25% of ambient PM2.5. We estimate 112,000 deaths are attributable annually to current plus planned coal-fired power plants. Not building planned plants would avoid at least 844,000 premature deaths over the life of these plants. Imposing a tax on electricity that reflects these local health benefits would incentivize the adoption of renewable energy.

Keywords: Air Pollution, India, Health Effects, Coal-Fired Power Plants

The U.S. airline industry has experienced consolidation in the last decade. At the same time, global environmental concerns have continued to grow. This paper examines the impact of three recent airline mergers on the environment by comparing per-departure NOX emission and the total NOX emission from merging firms at a given airport versus those emitted by non-merging firms at the same airport, by focusing on emissions from airplane flight landing/take-off cycles. The regression results suggest that mergers overall have no impact on either per-departure NOX emissions or total NOX emissions, while some individual mergers resulted in decreased emissions. However, this study finds that mergers have a negative impact on NOX emissions in the medium term when flight destinations are hub airports and a positive impact on NOX emissions in the medium term when flight destinations are non-hub airports.

Keywords: Airline Industry, Merger Analysis, Air Pollution