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Consequences of the Clean Water Act and the Demand for Water Quality

January 2017

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  Authors: Janet Currie, Reed Walker, John Voorheis

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  CES-20-02

  Racial differences in exposure to ambient air pollution have declined significantly in the United States over the past 20 years. This project links restricted-access Census Bureau microdata to newly available, spatially continuous high resolution measures of ambient particulate pollution (PM2.5) to examine the underlying causes and consequences of differences in black-white pollution exposures. We begin by decomposing differences in pollution exposure into components explained by observable population characteristics (e.g., income) versus those that remain unexplained. We then use quantile regression methods to show that a significant portion of the 'unexplained' convergence in black-white pollution exposure can be attributed to differential impacts of the Clean Air Act (CAA) in non-Hispanic African American and non-Hispanic white communities. Areas with larger black populations saw greater CAA-related declines in PM2.5 exposure. We show that the CAA has been the single largest contributor to racial convergence in PM2.5 pollution exposure in the U.S. since 2000 accounting for over 60 percent of the reduction.
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• Working Paper

  
  
  Energy Prices, Pass-Through, and Incidence in U.S. Manufacturing*
  

  January 2016

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• Working Paper

  
  
  Every Breath You Take, Every Dollar You'll Make: The Long-Term Consequences of the Clean Air Act of 1970
  

  September 2013

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  Fatal Errors: The Mortality Value of Accurate Weather Forecasts
  

  June 2023

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• Working Paper

  
  
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  November 2020

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  Evidence shows that environmental quality shapes human capital at birth with long-run effects on health and welfare. Do these effects, in turn, affect the economic opportunities of future generations? Using newly linked survey and administrative data, providing more than 150 million parent/child links, we show that regulation-induced improvements in air quality that an individual experienced in the womb increase the likelihood that their children, the second generation, attend college 40-50 years later. Intergenerational transmission appears to arise from greater parental resources and investments, rather than heritable, biological channels. Our findings suggest that within-generation estimates of marginal damages substantially underestimate the total welfare effects of improving environmental quality and point to the empirical relevance of environmental quality as a contributor to economic opportunity in the United States.
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• Working Paper

  
  
  Plant Vintage, Technology, and Environmental Regulation
  

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  Does the impact of environmental regulation differ by plant vintage and technology? We answer this question using annual Census Bureau information on 116 pulp and paper mills' vintage, technology, productivity, and pollution abatement operating costs for 1979-1990. We find a significant negative relationship between pollution abatement costs and productivity levels. This is due almost entirely to integrated mills (those incorporating a pulping process), where a one standard deviation increase in abatement costs is predicted to reduce productivity by 5.4 percent. Older plants appear to have lower productivity but are less sensitive to abatement costs, perhaps due to 'grandfathering' of regulations. Mills which undergo renovations are also less sensitive to abatement costs, although these vintage and renovation results are not generally significant. We find similar results using a log-linear version of a three input Cobb-Douglas production function in which we include our technology, vintage, and renovation variables. Sample calculations of the impact of pollution abatement on productivity show the importance of allowing for differences based on plant technology. In a model incorporating technology interactions we estimate that total pollution abatement costs reduce productivity levels by an average of 4.7 percent across all the plants. The comparable estimate without technology interactions is 3.3 percent, approximately 30% lower.
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• Working Paper

  
  
  Pollution Abatement Costs, Regulation And Plant-Level Productivity
  

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