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American Economic Review: Vol. 101 No. 6 (October 2011)

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Clearing the Air? The Effects of Gasoline Content Regulation on Air Quality

Article Citation

Auffhammer, Maximilian, and Ryan Kellogg. 2011. "Clearing the Air? The Effects of Gasoline Content Regulation on Air Quality." American Economic Review, 101(6): 2687-2722.

DOI: 10.1257/aer.101.6.2687

Abstract

This paper examines whether US gasoline content regulations, which impose substantial costs on consumers, have successfully reduced ozone pollution. We take advantage of spatial and temporal variation in the regulations' implementation to show that federal gasoline standards, which allow refiners flexibility in choosing a compliance mechanism, did not improve air quality. This outcome occurred because minimizing the cost of compliance does not reduce emissions of those compounds most prone to forming ozone. In California, however, we find that precisely targeted, inflexible regulations requiring the removal of particularly harmful compounds significantly improved air quality. (JEL L51, L71, L78, Q53, Q58)

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Authors

Auffhammer, Maximilian (U CA, Berkeley)
Kellogg, Ryan (U MI)

JEL Classifications

L51: Economics of Regulation
L71: Mining, Extraction, and Refining: Hydrocarbon Fuels
L78: Industry Studies: Primary Products and Construction: Government Policy
Q53: Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
Q58: Environmental Economics: Government Policy


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