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Clean identification? The effects of the clean air act on air pollution, exposure disparities and house prices

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  • Sager, Lutz
  • Singer, Gregor

Abstract

We assess the U.S. Clean Air Act standards for fine particulate matter (PM₂.₅). Using high resolution data, we find that the 2005 regulation reduced PM₂.₅ levels by 0.4μg/m³ over five years, with larger effects in more polluted areas. Standard difference-in-differences overstates these effects by a factor of three because time trends differ by baseline pollution, a bias we overcome with three alternative approaches. We show that the regulation contributed to narrowing Urban-Rural and Black-White PM₂.₅ exposure disparities, but less than difference-in-differences suggest. Pollution damages capitalized into house prices, on the other hand, appear larger than previously thought when leveraging regulatory variation.

Suggested Citation

  • Sager, Lutz & Singer, Gregor, 2025. "Clean identification? The effects of the clean air act on air pollution, exposure disparities and house prices," LSE Research Online Documents on Economics 121984, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:121984
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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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