nep-res New Economics Papers
on Resource Economics
Issue of 2016‒02‒29
four papers chosen by
Maximo Rossi
Universidad de la República

  1. Gray Matters: Fetal Pollution Exposure and Human Capital Formation By Prashant Bharadwaj; Matthew Gibson; Joshua Graff Zivin; Christopher Neilson
  2. Credit Constraints, Technology Upgrading, and the Environment By Andersen, Dana C.
  3. Potential Climate Risks in Financial Markets: A Literature Overview By Hjort, Ingrid
  4. Welfare measures to assess urban quality of life By Francesco Andreoli; Alessandra Michelangeli

  1. By: Prashant Bharadwaj (University of California-San Diego); Matthew Gibson (Williams College); Joshua Graff Zivin (University of California-San Diego); Christopher Neilson (Princeton University)
    Abstract: This paper examines the impact of fetal exposure to air pollution on 4th grade test scores in Santiago, Chile. We rely on comparisons across siblings which address concerns about locational sorting and all other time-invariant family characteristics that can lead to endogenous exposure to poor environmental quality. We also exploit data on air quality alerts to help address concerns related to short-run time-varying avoidance behavior, which has been shown to be important in a number of other contexts. We find a strong negative effect from fetal exposure to carbon monoxide (CO) on math and language skills measured in 4th grade. These effects are economically significant and our back of the envelope calculations suggest that the 50% reduction in CO in Santiago between 1990 and 2005 increased lifetime earnings by approximately 100 million USD per birth cohort.
    Keywords: human capital, air pollution, avoidance behavior, carbon monoxide
    JEL: J24 Q51 Q53 Q56 I12 I18
    Date: 2016–02
  2. By: Andersen, Dana C. (University of Alberta, Department of Economics)
    Abstract: Access to credit is indispensable to financing firm investment and therefore bears on technology decisions and in turn environmental performance. This paper develops a tractable general equilibrium model to analyze the effect of credit constraints on production-generated pollution emissions. The model demonstrates that reducing credit constraints increases the scale of production (scale effect) and increases the number of firms taking up production (market size effect), while it also reduces emissions per unit of output (technique effect) and increases the share of firms investing in the technology upgrade (composition effect). Because the former and latter effects are plausibly confounding in nature, the net effect of credit constraints on pollution emissions is an empirical question. This paper demonstrates that, using variation in the timing of credit market reforms, reducing credit constraints significantly improves air pollution (sulphur dioxide and lead concentrations) in both developing and developed countries. The results are robust using various approaches, including two-way fixed effects, lagged dependent variables, and difference-in-differences.
    Keywords: Credit constraints; choice of technology; air pollution
    JEL: D24 D53 Q53 Q55
    Date: 2015–04–01
  3. By: Hjort, Ingrid (Dept. of Economics, University of Oslo)
    Abstract: This literature overview conducts a systematic study of how the climate related risks from global warming may aff ect fi nancial markets. The climate related risk is divided into three subcategories, the environmental uncertainty, the economic climate risk and the climate policy risk, which all of them may aff ect the markets directly or indirectly. The perspective is broad, including production possibilities, productivity, social disturbance, health, migration and trade. Stock prices are affected by beliefs about future path of expected return. Climate change signifi es possible disruptions in production and consumption possibilities, which may imply reduction in future asset values. Expectations of this will reduce asset values today. There are few studies in the research literature that explicitly attempt to identify mispricing. The survey compares di fferent event studies that may reflect how the financial market react to the climate related risks. The empirical evidence is mixed, and few general conclusions can be drawn. It is unclear whether the market reactions are consistent with rational market valuation of the climate risk.
    Keywords: climate change; climate risk; climate policy risk; fi nancial markets; stranded assets; divestment
    JEL: G11 G12 G14 G32 Q54 Q58
    Date: 2016–02–01
  4. By: Francesco Andreoli (Department of Economics (University of Verona)); Alessandra Michelangeli (University of Milano-Bicocca, DEMS, Piazza Ateneo Nuovo 1, Milan I-20126, Italy)
    Abstract: The standard index of urban quality of life provides an approximated value of the quality of life, since it associates the bundles of amenities observed in urban areas with their implicit marginal prices, and not with the prices of infra-marginal units. In this paper, we adjust the standard measure to determine the monetary value of any bundle, which might substantially differ from the bundle of the marginal quantities of amenities. Our methodology relies on a welfare measure that represents the individual willingness to give up (accept) to insure (forego) a change in the current distribution of amenities across areas will take place, keeping the level of utility unchanged. We obtain a new measure, the value-adjusted quality of life index, that can be identified from parametric models of consumer preferences. We use this index to measure the quality of life in the city of Milan.
    Keywords: Hedonic Models, Quality of Life, Structural models
    JEL: D6 H4 R1 R2
    Date: 2014–06

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