Essays in Environmental Economics and Policy

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2020

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Abstract

This dissertation is comprised of three research papers that entail implications for public policy. The first two papers are related to environmental policy, and specifically air pollution. The marginal willingness to pay to reduce air pollution is often estimated from the expenditures consumers undertake to avoid exposure to changes in air quality. Consumer awareness of air quality changes is commonly assumed even though limited attention causes decision-making in many settings to vary with the salience of features entering the utility function. The first paper (``Defensive Expenditures, Salience, and Limited Attention'') studies how defensive expenditures vary with the salience of air quality information while controlling for air quality, itself. It uses a 10-year panel data of defensive expenditures, comprised of masks and air-filter purchases from California. Salience is measured in three different ways. First, internet search intensity data from Google is used as a proxy for salience. Second, appearances of tweets about air pollution to Twitter users are used to measure salience. Finally, exogenous media shocks because of California fires are used as a proxy for pollution salience. Individuals are shown to exhibit inattention to air quality, causing estimates to understate willingness to pay for air quality improvements by 20\%.

The second paper (``Air Pollution and Averting Behavior Disparities: Evidence from NYC Transportation'') addresses the inequality in the burdens of air pollution. Exposure to air pollution is a function of averting behaviors that are likely to vary by income due to heterogeneous ability to pay and marginal utility of income. Consequently, poor and minorities may be relatively more exposed to pollution than other demographic groups even conditional on ambient concentrations. Using data on New York City taxi ridership and use of city bicycles, the paper identifies heterogeneous changes in transportation mode decisions across income groups in response to air pollution, exposure to which varies by mode. It shows that (1) high air pollution causes bike ridership to decrease and commute-related taxi trips to increase. (2) The increase in taxi trips is more pronounced in high income neighborhoods than in low income areas. These results suggest that transportation modes that involve higher exposure to air pollution are less desirable when air quality is low and that the utilization of alternative transportation modes to avert air pollution exposure is unequal across income groups.

The third paper (``Do Mask Mandates Work to Contain the Spread of COVID-19?'', with Qingran Li) is related to the recent COVID-19 pandemic disruptions, and studies the effects of mask mandates. With struggling economies and high unemployment rates, policy makers are seeking means to reopen the economy safely. In the absence of vaccines, discussions about mask mandates among non-pharmaceutical interventions emerged, and research is needed for informed, evidence based policy. The paper uses COVID-19 cases data, mobility data, and mask mandates data at the county level for all counties in the United States. It provides evidence that masks reduce cases, and cases conditional on the mobility of residents. The results show that while mobility marginally increases COVID cases, this marginal increase is reduced by 82\% when there is a public mask mandate. The paper also uses the synthetic control method for comparison, and finds causal evidence that mask mandates reduce COVID-19 cases. These findings have direct implications for disease control, and suggest that a mask mandate policy can reduce infection risks, when combined with economic reopening policies.

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Alshammasi, Hussain (2020). Essays in Environmental Economics and Policy. Dissertation, Duke University. Retrieved from https://hdl.handle.net/10161/22199.

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