Essays on the Economics of Environment and Health

Abstract

This dissertation consists of two chapters that examine the intersection of environmental policy and health outcomes. Chapter 1 evaluates the effects of the Nitrogen Oxide Budget Program (NBP)—a cap-and-trade initiative designed to regulate ozone pollution—on infant health. Using the universe of U.S. birth records from 1995 to 2008, I implement event study models within a triple-difference framework. The analysis reveals that, although the NBP led to reductions in earnings and employment, the pollution-related health improvements resulted in net gains for infant well-being. Full exposure to the NBP reduced the incidence of low birth weight and very preterm births by approximately 5.5% and 13%, respectively. Heterogeneity analyses show considerably larger benefits for Black mothers, low-educated mothers, and single mothers. I provide empirical evidence to rule out confounding factors such as changes in selective fertility and healthcare access. A series of placebo tests finds no evidence of pre-existing trends that could explain the results. Finally, I discuss the economic significance of these findings in the context of other environmental exposures and their long-term consequences.Chapter 2 investigates whether the Acid Rain Program (ARP)—the first market-based cap-and-trade system targeting power plant emissions and a key amendment to the Clean Air Act—affected birth outcomes. Using the universe of U.S. birth records from 1985 to 2010, I implement event study and difference-in-differences designs to compare changes in birth outcomes between counties with high and low exposure to ARP emissions over time. The findings indicate significant improvements in infant health, particularly among those at the lower end of the birth weight and gestational age distributions. Exposure to the ARP is associated with a 2.9% reduction in low birth weight and a 3.9% reduction in preterm birth. The effects are most pronounced among Black and low-educated mothers, highlighting the potential of environmental regulation to reduce health disparities and environmental injustice. I conclude by discussing the broader policy implications and economic relevance of these results in the context of the existing literature.