The stock market effect of air pollution: evidence from China

In financial studies, environmental stimuli such as sunshine, temperature, and daylight are often used as proxies for people’s collective mood swings to test their effects on the stock market. China has experienced serious air pollution problems in recent years, and Chinese public awareness of air pollution has soared. In this paper, we use China as a natural experiment to investigate the effect on stock returns of depressed moods induced by air pollution. Daily air-pollution data from 2005 to 2014 are analysed and the results obtained from the empirical research show that a contemporaneous negative and a two-day lagged positive relationship exists between air pollution levels and stock returns over this time period. The relationship is mediated by the influence of air pollution on investment decisions. The results also indicate that the effect is weakened for companies that protect air quality, but no stronger effect is detected for polluting companies. The findings imply that air pollution is a behavioural factor with some connection to stock returns in China.     

An Empirical Study of the Impact of Corruption on Environmental Performance: Evidence from Panel Data

This paper extends the empirical debate on the effects of corruption on environmental degradation by considering a recently available measure of environmental quality, the Environmental Performance Index. This indicator is more comprehensive than the measures of air pollutant emissions commonly used in the literature and, in particular, can also capture the impact of pollution on human health. This allows for a better understanding of the actual effects of a wide range of human activities on the ecosystem. From a panel data analysis, two regularities emerge. First, corruption deteriorates the overall environmental quality. This effect is robust and persistent. Second, our findings highlight the improvement of environmental quality as income rises, even at an initial level of development. This is not in contradiction with the EKC hypothesis because an increase in income levels provides positive externalities on the whole environmental quality by compensating the mere negative effects induced by industrialization on the emission levels. As a consequence, in emerging economies, policies fighting corruption and enhancing development are very likely to improve the environmental performances.     

Local environmental quality and life-satisfaction in Germany

Hitherto the task of valuing differences in environmental quality arising from air pollution and noise nuisance has been carried out mainly by using the hedonic price technique. This paper proposes a different approach to derive information on individual preferences for local environmental quality. It analyses data drawn from the German socio-economic panel in an attempt to explain differences in self-reported levels of well-being in terms of environmental quality. Mindful of existing research a large number of other explanatory variables are included to control for socio-demographic differences, economic circumstances as well as neighbourhood characteristics. Differences in local air quality and noise levels are measured by how much an individual feels affected by air pollution or noise exposure in their residential area. The evidence suggests that even when controlling for a range of other factors higher local air pollution and noise levels significantly diminish subjective well-being. But interestingly differences in perceived air and noise pollution are not capitalised into differences in house prices.     

The Environmental Kuznets Curve and Flow versus Stock Pollution: The Neglect of Future Damages

In this paper we offer a possible explanation for the empirical finding that the pollution-income relationship (PIR) for flow pollutants is an environmental Kuznets curve (EKC), i.e. inverted-U shaped, but that the PIR for stock pollutants is monotonically rising. We analyse an overlapping generations model with two pollutants: The flow pollutant causes immediate damages, but the stock pollutant harms the environment only in the future. Hence, a succession of myopic governments lets stock pollution grow with income. In contrast, the flow pollutant follows an EKC whose downturn might be caused by the neglect of future damages and by ever rising stock pollution: Without the stock pollutant the PIR for the flow pollutant can increase monotonically. We also show that the turning point of the EKC for the flow pollutant lies at lower levels of income and of flow pollution if stock pollution is high and harmful. This casts doubts on most empirical EKC studies because they assume that the turning point occurs at the same income level in all countries. However, it is consistent with recent empirical findings that the income level at the turning point of the EKC varies across countries.     

Hot spots regulation and environmental justice

This paper analyzes whether regulating “hot spots” of toxic air pollution by increasing the spatial resolution of regulation could address environmental justice (EJ) concerns. To examine this question, this paper develops a decision model of a regulator choosing emission controls within a net cost minimizing framework. An empirical application of the model using air toxic emission data for Escambia and Santa Rosa Counties in Florida estimates the emission standards and spatial distribution of risks at a coarse and a finer spatial resolutions. Implications for EJ are analyzed by combining the simulated spatial risk distributions at the two resolutions with the demographic data. Results indicate that different measures of EJ point to different conclusions regarding the question of whether finer resolution regulation alleviates EJ concerns. The paper concludes with a discussion of the implications for EJ policy.     

Political Blue Sky: Evidence from the Local Annual “Two Sessions” in China

During politically sensitive periods, Chinese governments tend to take urgent administrative measures to control air pollution creating the temporary political blue sky. This empirical study uses the case of local "two sessions", one of the most politically sensitive periods in localities and examines the daily air quality index (AQI) as well as concentration data of air pollution components, including PM2.5, PM10, SO₂, CO, NO₂ and O₃ of 319 cities in China from November 2013 to June 2018. Results show that AQI decreases by approximately 4.5% during local "two sessions" periods compared to non- “two sessions” periods. Air quality improvements are mainly reflected in visible pollutants such as PM2.5, PM10 and SO₂. The mitigation of NO₂ and O₃, which is not observable by public, is not significant. In addition, the empirical results indicate that air quality deteriorates dramatically after the "two sessions". Therefore, the political blue sky comes with the price of catching up pollution that occurs after the political events.     

It's an ill wind: The effect of fine particulate air pollution on respiratory hospitalizations

While a growing literature in economics has established the harmful health effects of longstanding criteria air pollutants such as ozone and carbon monoxide, fine particulate air pollution is relatively understudied. This paper provides evidence on the harmful effects of fine particulate pollution for Ontario, where municipalities enjoy particulate levels well below US Environmental Protection Agency (EPA) standards and predominantly below Canada‐wide standards. Results provide strong evidence for the detrimental effect of fine particulate pollution for the respiratory health of children, with a one standard deviation change in particulate pollution, leading to a 4% increase in respiratory admissions. While these results inform the stringency of current pollution standards, they also highlight the importance of an international approach to air quality. For instance, the paper also shows that particulate levels in Ontario municipalities are strongly influenced by southerly winds from US jurisdictions, which adhere to more lenient EPA standards.     

“Cleansing the air at the expense of waterways?” Empirical evidence from the toxic releases of coal-fired power plants in the United States

Environmental policies in the United States have primarily taken the form of media-specific regulations that emphasize end-of-pipe pollution control. This can lead to the shifting of pollution across environmental media, thereby having the potential to solve one environmental problem by creating a new problem. This study uses data from 228 coal-fired power plants that report to the Toxics Release Inventory to conduct an empirical examination of the extent to which media-specific regulation has caused power plants to shift their toxic air releases to waterways, land, or transfers for offsite recycling facilities. Controlling for plant-level fixed effects, scale of production, and environmental inspections and enforcement under air regulation, this study finds that adopting tougher air pollution regulation that designates counties as being in nonattainment status with the National Ambient Air Quality Standards significantly increased toxic releases to waterways and land.     

媒体压力与空气质量改善

本文使用2014—2017年我国省级报纸对省份内地级市的空气污染报道数据,实证检验了媒体压力在促进空气质量改善中的作用。研究发现,媒体对污染报道的增加,显著促进了城市空气质量的改善,且这种改善的效果受污染报道发表报纸是否为省级党委机关报以及城市主政官员特征的影响。这意味着,媒体污染报道主要通过对政府官员形成的压力来促进地方政府进行污染治理、改善空气质量。进一步研究发现,环境治理投入的增加与工业污染排放的减少,是媒体压力促进城市空气质量改善的有效途径。本文的结论,对于理解新时代我国舆论监督的作用机制以及更好发挥新闻媒体监督在环境治理中的作用,提供了新的视角。     

The Implications for Health,Depression, and Life Satisfaction from a Permanent Increase in Income for the Disadvantaged Elderly: Evidence from Taiwan

This paper uses an exogenous increase in income for a specific subgroup to explore the extent to which higher income leads to higher levels of health and well-being. In 1995, the Taiwanese government implemented the Senior Farmer Welfare Benefit Interim Regulation (SFWBIR) that was a pure cash injection to senior farmers. A difference-in-differences (DiD) approach is used on survey data from the Taiwanese Health and Living Status of Elderly in 1989 and 1996 to evaluate the short-term effect of the SFWBIR on self-assessed health, depression, and life satisfaction (LS). Senior manufacturing workers are employed as a comparison group for senior farmers in the natural experiment. This paper provides evidence that the increase in income caused by this pension reform significantly improved the mental health of senior farmers by reducing 1.697 points of the depression scale in DiD and 2.178 points in the robust estimation; however, it had no significant short-term impact on self-assessed health or LS.     

Are Democracies Cleaner?

We inquire whether democracies enjoy lower pollution levels than autocracies by investigating the ‘clean democracy hypothesis’, which posits that democracies have a more demand-determined policy formation leading to more stringent environmental policies. We test this hypothesis with a large data set covering 137 countries and the period 1970–2012 using eleven different air pollutants as endogenous variables and a wide range of control variables measuring democracy, development stage, globalization, and factor endowments. We find no consistent evidence that democracies are cleaner, not even the richer ones, which casts doubt on the validity of single pollutants studies. Numerous checks show the robustness of our results.     

ESTIMATING THE IMPACT OF MAJOR LEAGUE BASEBALL GAMES ON LOCAL AIR POLLUTION

Professional sporting events attract millions of fans to urban areas each year as they cheer on their favorite teams. While benefits, such as increased tax revenues and economic development, are often cited as reasons to host a professional sports franchise, the public and private costs receive much less attention. This paper uses air quality readings from the Environmental Protection Agency and Major League Baseball schedules to estimate the impact of Major League Baseball games on local air pollution. The results suggest that attendance at a Major League Baseball game has a statistically significant but negligible impact on local air pollution. (JEL Q53, R11)     

Policy choice for end-of-pipe abatement technology adoption under technological uncertainty

Regulators have increasingly become concerned about end-of-pipe abatement technologies because they not only play a crucial role in air pollution control but also ensure the achievement of the deep carbon emissions reduction target. This paper investigates the effect of emission taxes and standards on the adoption of end-of-pipe abatement technology when the arrival time and degree of improvement of the new emissions abatement technology are uncertain. We find that the ranking of emission taxes and standards in terms of motivating early adoption depends on the policy stringency. More specifically, for high levels of environmental stringency, standards induce an earlier technology adoption than taxes, while the opposite conclusion holds for low levels of environmental stringency. The sensitivity analysis shows that these findings are robust to various relevant crucial parameters. Finally, the implications for the choice of environmental policy have been provided.     

Why do Women feel the way they do about market work: the role of familial,social and economic factors

Various empirical studies find evidence of that women tend to underestimate the probability that they will work in the market in the future. This can lead to initial under-investment in market human capital and resulting earnings penalties later in life. However, virtually no study investigates the familial, social and economic factors that cause women to plan/expect not to work. Thus the onus of “incorrect” plans is placed wholly on the women, and society absolved of any responsibilities in helping form those plans. This work uses data from the NLSYW and investigates the effects of a wide range of factors on women's future work plans. Results indicate that plans are definitely not formed in a vacuum, and that familial, social and economic circumstances all play a decisive role in shaping them. Some suggestions are made for policy formation to encourage women to plan on working in future.     

The missing piece: Valuing averting behavior for children's ozone exposures

Individuals can reduce their exposure to air pollution by reducing the amount of time they spend outdoors. Reducing outdoor time is an example of an averting behavior that should be measured as part of willingness to pay (WTP) for improvements in air quality. In this paper, we estimate parents’ WTP to prevent restrictions on a child's outdoor time from a stated-preference (SP) conjoint survey. We combine this WTP measure with an estimate of reductions in time spent outdoors on high-ozone days from an activity-diary study to estimate this averting behavior component of WTP for reductions in ozone pollution.     

Technology adoption decisions under a mixed regulatory system of tradable permits and air pollution fees for the control of Total Suspended Particulates in Taiwan

By using a newly proposed tradable permit system built under the current air pollution fee regulation for the control of Total Suspended Particulates in Taiwan as an example, a mixed-integer non-linear programming model that minimizes the total regulatory costs of firms is applied to investigate how different permit trading ratios and the design of banking might affect firms’ technology adoption decisions and permit trading behavior. By incorporating binary variables in the model to represent firms’ decisions as to whether or not to install new control equipment, the results show that when the unit air pollution fee rate is higher than the firms’ abatement costs, the design of banking causes many firms to install new control equipment that results in an over-reduction of emissions. If no air pollution fee is imposed, the trading ratio plays a more important role than the reservation rate for banking in determining the firms’ emission reduction strategies under a pure permit trading scheme. While the conclusion from this study that uses a non-uniformly mixed pollutant as an example may hold only when certain conditions are met, the framework can be applied to other uniformly mixed pollutants through parameter changes without any limitation. In addition, the modeling technique presented here offers policy-makers a very convenient approach to empirical analysis.      

Analysis of Air Pollution Impact Factors in China: A MIMIC Modeling Approach

In this study, we investigate the impact factors on air pollution in terms of CO2, SO2 and NOx emissions simultaneously in China and compare changes in air pollution across provinces from 1998 to 2011 using a Multiple Indicators and Multiple Causes Model (MIMIC) within a Structural Equation Model (SEM) framework. Our findings reveal that GDP per capita and total population have the largest impacts on air pollution, followed by energy intensity, foreign direct investment, population density, and industrialization. The results also reveal that the inverted U-shaped Environmental Kuznets Curve (EKC) hypothesis exists in China. Our findings also demonstrate that Shandong, Jiangxi and Liaoning are the top three provinces with the most deteriorated air quality while Xinjiang, Fujian and Ningxia are with the best. These results not only contribute to advancing the existing literature, but also merit particular attention from policy-makers in China.     

Effects of different environmental regulations and their heterogeneity on air pollution control in China

This study endeavors to explore the impact of different environmental regulations and their heterogeneity on air pollution control in China. By employing a slacks-based measure of directional distance function model, considering undesirable outputs, the efficiency of air pollution control of China’s 30 provinces during 2001–2014 is evaluated. The estimates indicate that the efficiency of air pollution control is fluctuating, and there is obvious regional differences. By using provincial-level panel data and panel threshold models, empirical results show that: (1) There is a nonlinear relationship between environmental regulation and air pollution control efficiency, and it can be positively correlated, but it is constrained by the stringency of regulation: there is a single threshold for formal (command-and-control (CAC) and market-based) regulation, while there is a double threshold for informal regulation. (2) Different environmental regulations have different governance effects. Compared with CAC regulation, market regulation can attract more attention of enterprises. (3) It may be ineffective to expect informal regulation to improve the air pollution control efficiency. Therefore, in order to achieve real sustainable development, the government should set up reasonable regulation stringency and optimize the combination of regulation tools.

     

Effectiveness of air pollution standards in reducing mortality in India

India experiences some of the highest air pollution levels globally, with 13 of the 20 most polluted cities in the world. In this paper, we estimate the relationship between air pollution policies in India and mortality for people of all ages and all causes. We estimate the relationship between mortality and two major air pollution regulations, the Supreme Court Action Plan (SCAP) and the Catalytic Converter (CC) policy. Although data for mortality in India have improved over time, the annual average mortality for many districts is volatile, with many outliers and missing values. After addressing these measurement issues in a difference-in-differences setup, we do not find evidence that the policies were effective in significantly reducing mortality. In an effort to understand the potential benefits of reducing pollution levels in India, we investigate the association of different pollution types with mortality. This analysis relies upon relatively recent satellite data on PM_2.5 levels in India. We examine this relationship for India for the first time, using a fixed effects model in an attempt to address issues of endogeneity and measurement error. We find that PM_2.5 levels are positively associated with mortality, with a 10% increase in pollution conditionally associated with a 2.0% increase in the mortality rate.     

Air Pollution and Sick-leaves

During the last decade an increasing amount of studies have investigatedthe relationship between air pollution and human health effects. In thisstudy we investigate how these effects in turn induce reduced labourproductivity in terms of sick-leaves, which is an important factor inassessment of air pollution costs in urban areas. For this purpose weemploy a logit model along with data on sick-leaves from a large office inOslo and different air pollutants. Our results indicate that sick-leaves aresignificantly associated with particulate matter (PM₁₀), while theassociations with SO₂ and NO₂, are more ambiguous. We also tryto estimate the induced social costs in terms of lost labour productivity andincreased governmental expenditures, although these estimates are moreuncertain.