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Economics

Matthew Freedman

Clean Air Act

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Who Benefits From Environmental Regulation? Evidence From The Clean Air Act Amendments, Antonio Bento, Matthew Freedman, Corey Lang Jul 2015

Who Benefits From Environmental Regulation? Evidence From The Clean Air Act Amendments, Antonio Bento, Matthew Freedman, Corey Lang

Matthew Freedman

Using geographically disaggregated data and exploiting an instrumental variable strategy, we show that, contrary to conventional wisdom, the benefits of the 1990 Clean Air Act Amendments (CAAA) were progressive. The CAAA created incentives for local regulators to target the initially dirtiest areas for cleanup, creating heterogeneity in the incidence of air quality improvements that favored lower-income households. Based on house price appreciation, households in the lowest quintile of the income distribution received annual benefits from the program equal to 0.3% of their income on average during the 1990s, over twice as much as those in the highest quintile.

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