Canary in a Coal Mine: Infant Mortality, Property Values, and Tradeoffs Associated with Mid-20th Century Air Pollution

65 Pages Posted: 11 Apr 2016

See all articles by Karen Clay

Karen Clay

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management; National Bureau of Economic Research (NBER)

Joshua Lewis

University of Montreal

Edson Severnini

Carnegie Mellon University

Multiple version iconThere are 2 versions of this paper

Date Written: April 2016

Abstract

Investments in local development and infrastructure projects often generate negative externalities such as pollution. Previous work has either focused on the potential for these investments to stimulate local economic activity or the health costs associated with air pollution. This paper examines the tradeoffs associated with the historical expansion in coal-fired electricity generation in the United States, which fueled local development but produced large amounts of unregulated air pollution. We focus on a highly responsive measure of health tradeoffs: the infant mortality rate. Our analysis leverages newly digitized data on all major coal-fired power plants for the period 1938-1962, and two complementary difference-in-differences strategies based on the opening of power plants and new generating units at existing sites. We find that coal-fired power plants imposed large negative health externalities, which were partially offset by the benefits from local electricity generation. We uncover substantial heterogeneity in these tradeoffs, both across counties and over time. Expansions in coal capacity led to increases in infant mortality in counties with high base- line access to electricity, but had no effect in low-access counties. Initial expansions in coal capacity led to decreases in infant mortality, but subsequent additions led to increases in infant mortality. These evolving tradeoffs highlight the importance of accounting for both current and future payoffs when designing environmental regulation.

Suggested Citation

Clay, Karen B. and Lewis, Joshua and Severnini, Edson, Canary in a Coal Mine: Infant Mortality, Property Values, and Tradeoffs Associated with Mid-20th Century Air Pollution (April 2016). NBER Working Paper No. w22155. Available at SSRN: https://ssrn.com/abstract=2762102

Karen B. Clay (Contact Author)

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Joshua Lewis

University of Montreal ( email )

C.P. 6128 succursale Centre-ville
Montreal, Quebec H3C 3J7
Canada

Edson Severnini

Carnegie Mellon University

Pittsburgh, PA 15213-3890
United States

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