Days of Haze: Environmental Information Disclosure and Intertemporal Avoidance Behavior

24 Pages Posted: 27 Aug 2008 Last revised: 21 Jun 2014

See all articles by Joshua Graff Zivin

Joshua Graff Zivin

Columbia University - Department of Health Policy and Management; National Bureau of Economic Research (NBER)

Matthew Neidell

Columbia University; University of Chicago - Department of Economics and CISES; PERC - Property and Environment Research Center

Date Written: August 2008

Abstract

In this paper, we investigate the dynamics of informational regulatory approaches by analyzing the impact of smog alerts issued on consecutive days on discretionary outdoor activities in Southern California. Short-run adjustments to transitory risk entail costs that are likely to influence the set of evasive actions pursued by those at risk. Our results confirm that the cost of intertemporally substituting activities is increasing over time: when alerts are issued on two successive days, any response on the first day has largely disappeared by the second day. Small reprieves from alerts, however, reset these costs. Our findings imply that a time-varying decision rule that accounts for multiple day air quality forecasts may improve social welfare.

Suggested Citation

Zivin, Joshua Graff and Neidell, Matthew, Days of Haze: Environmental Information Disclosure and Intertemporal Avoidance Behavior (August 2008). NBER Working Paper No. w14271, Available at SSRN: https://ssrn.com/abstract=1248932

Joshua Graff Zivin (Contact Author)

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Matthew Neidell

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University of Chicago - Department of Economics and CISES ( email )

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