Essays in Environmental Economics

Abstract

This dissertation focuses on the causes and consequences of environmental inequalities, as well as how housing market restrictions interact with topics in environmental economics.

The first chapter---joint with Jonathan Colmer and John Voorheis---studies the causes and consequences of urban heat islands. Combining new administrative data with a novel proxy for experienced temperature at the neighborhood scale, we show that a hot day increases mortality by six additional deaths per 100,000 for the elderly population living in neighborhoods with a high concentration of impervious surfaces, relative to the median. These patterns hold even within counties and cannot be explained by selection. Moreover, the increase in mortality among elderly Black Americans following a hot day is three times that of elderly White Americans, and half of this disparity can be attributed to Black individuals living in more impervious neighborhoods. We then present suggestive evidence that imperviousness is driven by density zoning policies, and document that the racial incidence of density is reflected in a long historical process since the Great Migration.

Chapter two, also joint with Jonathan Colmer and John Voorheis, provides a comprehensive documentation of racial disparities in heat exposure in the united states using rich, individual-level demographic and economic data combined with twenty years of high-resolution satellite data on surface temperature. We document that within the same commuting zone, Non-Hispanic Black individuals are exposed to higher surface temperatures than Non-Hispanic White individuals at every percentile of the income distribution. Our findings indicate that racial differences in economic circumstances are not a major driver of racial heat disparities in the United States.

In the third chapter, Eleanor Krause and I interrogate the standard hedonic valuation approach to estimating the benefits of shifting local environmental amenities. In a general equilibrium setting with elastic housing supply, we show that amenity improvements may yield an expansion of the housing market (the quantity effect), muting the capitalization of the amenity into housing prices (the price effect), such that inferring benefits solely from price changes underestimates the true willingness-to-pay. We empirically demonstrate how the elasticity of the local housing market affects valuations of amenity changes in the context of local air quality improvements induced by the Clean Air Act's PM2.5 standards, and present consistent empirical evidence that the price capitalization of air quality improvements is substantially lower in places with more elastic housing markets. We present a simple model of spatial equilibrium of local prices and populations to estimate the marginal benefits of amenity improvements accounting for both price and quantity margins.