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An Assessment of Environmental PolicyEPA Grant Number: U915830
Title: An Assessment of Environmental Policy
Investigators: Aldy, Joseph E.
Institution: Harvard University
EPA Project Officer: Just, Theodore J.
Project Amount: $102,000
RFA: STAR Graduate Fellowships (2000) RFA Text | Recipients Lists
Research Category: Academic Fellowships , Economics and Decision Sciences , Fellowship - Economics
The objectives of this research project are to: (1) illustrate emissions divergence and investigate the causes of this divergence; (2) investigate how the value of a statistical life varies with age; and (3) estimate the benefits of providing air pollution concentration information to individuals. This research project includes the following topics for the three essays in my dissertation on environmental economics: (1) the divergence in per capita carbon dioxide emissions; (2) estimating the value of a statistical life; and (3) the benefits of the Air Quality Index (AQI) forecast program.
The research for the first topic, the divergence in per capita carbon dioxide emissions, will illustrate emissions divergence and investigate the causes of this divergence. After depicting historical carbon dioxide emissions trends and their associated divergence and forecasting future emissions trends, I will develop a structural model to motivate an empirical assessment of the determinants of this emissions divergence. Current work already draws on the environmental Kuznet's Curve literature to identify possible explanations for the lack of emissions convergence.
The second topic, estimation of the value of a statistical life, will address how the value of a statistical life varies by age. The first stage will expand the standard log (wage) regression model to consider more flexible representations of the wage-risk relationship as a function of age. This will include investigation with more flexible parametric specifications, as well as semiparametric and nonparametric regressions. The second stage will consider possible applications of life-cycle models developed in various applied theory papers to characterize the relationship between age and the value of life. Current work draws from data collected in the Current Population Survey, but may be extended to include data collected through the Panel Study of Income Dynamics. Addressing this question will aid the U.S. Environmental Protection Agency (and other regulatory agencies whose actions affect mortality risk) in better assigning benefit values to the populations affected by their environmental regulations and policies.
The research for the third topic, the benefits of the AQI Forecast Program, would focus on estimating the benefits of providing air pollutant concentration information to individuals. The presumption is that individuals living in areas with publicly available information on air quality would make better decisions and investments in self-protection than those living in areas without such information. Identification would rely on both spatial and temporal variation in the reporting of forecast Pollution Standards Index/AQI values by metropolitan area. A differences-in-differences estimation strategy could illustrate the effects of possible self-protection behavior undertaken by individuals in urban areas with superior information about air quality. Possible benefits outcome variables to investigate include mortality and various morbidity effects, such as hospital admissions for respiratory-related ailments.