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The impact of environmental regulation on fetal health: Evidence from the shutdown of a coal-fired power plant located upwind of New Jersey

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Listed:
  • Yang, Muzhe
  • Chou, Shin-Yi

Abstract

Our study examines a case where cross-border air pollution had not been effectively dealt with by a decentralized, state level policymaking, letting a coal-fired power plant located on the border between two states pollute the downwind state for years without being controlled. We find that the shutdown of the power plant, thanks to a landmark ruling by the federal government, reduces the likelihoods of having a low birth weight baby and having a preterm birth by 15 percent and 28 percent, respectively, in areas downwind of the power plant. The ruling marks the first-ever federal level regulation under the Clean Air Act that overrides state-level regulations and is directly imposed upon a single pollution source. Our empirical setting emphasizes the importance of such regulation in curbing environmental free riding induced by jurisdictional borders, where pollution cost-shifting can be aided by natural forces such as prevailing winds.

Suggested Citation

  • Yang, Muzhe & Chou, Shin-Yi, 2018. "The impact of environmental regulation on fetal health: Evidence from the shutdown of a coal-fired power plant located upwind of New Jersey," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 269-293.
    • Handle: RePEc:eee:jeeman:v:90:y:2018:i:c:p:269-293
    DOI: 10.1016/j.jeem.2018.05.005
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    References listed on IDEAS

    as
    1. Muzhe Yang & Rhea A. Bhatta & Shin‐Yi Chou & Cheng‐I Hsieh, 2017. "The Impact of Prenatal Exposure to Power Plant Emissions on Birth Weight: Evidence from a Pennsylvania Power Plant Located Upwind of New Jersey," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 36(3), pages 557-583, June.
    2. Molly Lipscomb & Ahmed Mushfiq Mobarak, 2017. "Decentralization and Pollution Spillovers: Evidence from the Re-drawing of County Borders in Brazil," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(1), pages 464-502.
    3. James E. Monogan & David M. Konisky & Neal D. Woods, 2017. "Gone with the Wind: Federalism and the Strategic Location of Air Polluters," American Journal of Political Science, John Wiley & Sons, vol. 61(2), pages 257-270, April.
    4. Janet Currie & Lucas Davis & Michael Greenstone & Reed Walker, 2015. "Environmental Health Risks and Housing Values: Evidence from 1,600 Toxic Plant Openings and Closings," American Economic Review, American Economic Association, vol. 105(2), pages 678-709, February.
    5. H. Spencer Banzhaf & Randall P. Walsh, 2008. "Do People Vote with Their Feet? An Empirical Test of Tiebout," American Economic Review, American Economic Association, vol. 98(3), pages 843-863, June.
    6. Helland, Eric & Whitford, Andrew B., 2003. "Pollution incidence and political jurisdiction: evidence from the TRI," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 403-424, November.
    7. Sigman, Hilary, 2005. "Transboundary spillovers and decentralization of environmental policies," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 82-101, July.
    8. Janet Currie & Maya Rossin‐Slater, 2015. "Early‐Life Origins of Life‐Cycle Well‐Being: Research and Policy Implications," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 34(1), pages 208-242, January.
    9. Edson Severnini, 2017. "Impacts of nuclear plant shutdown on coal-fired power generation and infant health in the Tennessee Valley in the 1980s," Nature Energy, Nature, vol. 2(4), pages 1-9, April.
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    More about this item

    Keywords

    Environmental free riding; Power plants; Downwind; Fetal health;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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