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  5. Clean Identification? The Effects of the Clean Air Act on Air Pollution, Exposure Disparities and House Prices

American Economic Journal:
Economic Policy

ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)

Clean Identification? The Effects of the Clean Air Act on Air Pollution, Exposure Disparities and House Prices

  • Lutz Sager
  • Gregor Singer
American Economic Journal: Economic Policy (Forthcoming)

Abstract

We assess the U.S. Clean Air Act standards for fine particulate matter (PM₂.₅). Using highresolution data,we find that the 2005 regulation reduced PM₂.₅ levels by 0:4μg/m³ over five years, with larger effects in more polluted areas. Standard difference-in-differences overstates these effects by a factor of three because time trends differ by baseline pollution, a bias we overcome with three alternative approaches. We show that the regulation contributed to narrowing Urban-Rural and Black-White PM₂.₅ exposure disparities, but less than difference-in-differences suggest. Pollution damages capitalized into house prices, on the other hand, appear larger than previously thought when leveraging regulatory variation.

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