Does Environmental Policy Affect Income Inequality? Evidence from the Clean Air Act
AbstractThis paper quantifies the impact of environmental policy on income inequality. We focus on the Clean Air act and the National Ambient Air Quality standards for fine particulate matter and ozone. Using a matched difference-in-differences estimator, we find evidence that both standards increased inequality in market income and a measure of income that deducts per-capita air pollution damage from adjusted gross income. While pollution standards can reduce pollution levels and thus result in significant environmental benefits in aggregate, our findings suggest that these standards appear to distort the distribution of economic resources in complex, and at times unfortunate, ways.
CitationJha, Akshaya, Peter H. Matthews, and Nicholas Z. Muller. 2019. "Does Environmental Policy Affect Income Inequality? Evidence from the Clean Air Act." AEA Papers and Proceedings, 109: 271-76. DOI: 10.1257/pandp.20191062
- D31 Personal Income, Wealth, and Their Distributions
- D63 Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- K32 Energy, Environmental, Health, and Safety Law
- Q53 Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- Q58 Environmental Economics: Government Policy