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Clean Identification? The Effects of the Clean Air Act on Air Pollution, Exposure Disparities and House Prices
Clean Identification? The Effects of the Clean Air Act on Air Pollution, Exposure Disparities and House Prices
Lutz Sager
Gregor Singer
American Economic Journal: Economic Policy (Forthcoming)
Abstract
We assess the U.S. Clean Air Act standards for fine particulate matter (PM₂.₅). Using highresolution
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.