nep-res New Economics Papers
on Resource Economics
Issue of 2019‒09‒30
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Temperature and Mental Health: Evidence from the Spectrum of Mental Health Outcomes By Mullins, Jamie; White, Corey
  2. Asset Prices and Portfolios with Externalities By Steven Baker; Burton Hollifield; Emilio Osambela
  3. Do Property Rights Alleviate the Problem of the Commons? Evidence from California Groundwater Rights By Andrew B. Ayres; Kyle C. Meng; Andrew J. Plantinga

  1. By: Mullins, Jamie (University of Massachusetts Amherst); White, Corey (California Polytechnic State University)
    Abstract: This paper characterizes the link between ambient temperatures and a broad set of mental health outcomes. We find that higher temperatures increase emergency department visits for mental illness, suicides, and self-reported days of poor mental health. Specifically, cold temperatures reduce negative mental health outcomes while hot temperatures increase them. Our estimates reveal no evidence of adaptation, instead the temperature relationship is stable across time, baseline climate, air conditioning penetration rates, accessibility of mental health services, and other factors. The character of the results suggests that temperature affects mental health very differently than physical health, and more similarly to other psychological and behavioral outcomes. We provide suggestive evidence for sleep disruption as an active mechanism behind our results and discuss the implications of our findings for the allocation of mental health services and in light of climate change.
    Keywords: mental health, weather, climate, suicide, health
    JEL: I10 I12 I18 Q50 Q51 Q54
    Date: 2019–09
  2. By: Steven Baker (University of Virginia); Burton Hollifield (Carnegie Mellon University); Emilio Osambela (Board of Governors of the Federal Reserve System)
    Abstract: Elementary portfolio theory implies that environmentalists optimally hold more shares of polluting firms than non-environmentalists, and that polluting firms are more highly valued and attract more investment than otherwise identical firms that do not pollute. These results reflect the demand to hedge against states with high pollution, occurring when dirty technology is more heavily and profitably utilized. Pigouvian taxation can reverse the valuation and investment results, but environmentalists will still overweight polluters in their portfolios. We introduce countervailing motives for environmentalists to underweight polluters, comparing the implications when environmentalists coordinate to internalize pollution, or have nonpecuniary disutility from holding polluter stock. With nonpecuniary disutility, introducing a green derivative product may dramatically alter who invests most in polluters, but has no impact on aggregate pollution.
    Date: 2019
  3. By: Andrew B. Ayres; Kyle C. Meng; Andrew J. Plantinga
    Abstract: Property rights are widely prescribed for addressing the tragedy of the commons, yet causal evidence of their effectiveness remains elusive. This paper combines theory and empirics to produce a causal estimate of the net benefit of using property rights to manage groundwater. We develop a model of dynamic groundwater extraction to demonstrate how a spatial regression discontinuity design exploiting an incomplete property rights setting can recover a lower bound on the value of property rights. We apply this estimator to a major aquifer in water-stressed southern California, finding groundwater property rights led to substantial net benefits, as capitalized in land values. Heterogeneity analyses suggest that gains arise in part from the tradeability of property rights, enabling more efficient water use across sectors.
    JEL: D23 P14 P48 Q15 Q25
    Date: 2019–09

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