The property market impacts of water pollution trading (Job Market Paper)
This paper estimates the property market impacts of water pollution trading. Identifying the benefits of market-based approaches to surface water pollution control is empirically challenging due to the spatial heterogeneity of water bodies, making proper market formation and practical policy implementation difficult. The paper selects a well-suited policy case targeting nitrogen pollution in Long Island Sound and explores its impact on nearby housing prices both upstream and downstream of polluting sources, focusing on variation in which sources have sold or purchased pollution credits. The estimation results suggest that substantial reductions in nitrogen discharge throughout the post-treatment period lead to significant increases in nearby downstream housing prices. The paper also suggests that the program yields net benefit and outperform counterfactual command-and-control regulations, achieving similar environmental outcomes at lower cost. The paper lastly investigates more nuanced concerns about pollution trading, such as the formation of hotspots by reallocating pollution and corresponding distributional effects. While it finds spatially differential effects, it finds no evidence that this reallocation is associated with disproportionate impacts on communities based on income or race.
Estimating the Missing Benefits of Water Quality by Nesting Recreation Demand and Hedonic Modeling with Sheila Olmstead, Daniel Phaneuf, Yusuke Kuwayama, Jiameng Zheng, and Dimitris Friesen
The recreation demand literature suggests that individuals value water quality at recreation sites even at significant distance from where they live. We take a more comprehensive approach to valuing water quality by incorporating recreational demand into a hedonic property framework and exploring three U.S. coastal regions with active housing markets, abundant aquatic recreation opportunities, and significant pollution challenges: Puget Sound, Long Island Sound, and the Texas Gulf Coast.
Disruptions in Global Waste Trade: A General Equilibrium Analysis of Policy Responses with Chi Ta and Rachel Wellhausen
While the global waste trade has grown significantly over the past few decades, it is likely to bring different welfare implications than the trade of most normal goods. We develop an analytical general equilibrium model to examine how importing countries respond to shocks in the global waste trade and mitigate the negative externalities associated with waste imports, as well as to understand the broader economic and environmental implications.
Toxic Pollution in Age of Climate Change: Investigating the Impacts of Natural Disasters on Industrial Emissions in Texas with Margarita Petrusevich