Persistence in Environmental Exposure: Evidence from Anchoring

Ruohao Zhang, Huan Li, Kaiyi Wen and Neha Khanna

No 404509, 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri from Agricultural and Applied Economics Association

Abstract: Why do individuals raised in environmentally disadvantaged areas often remain in similar conditions as adults? We propose a behavioral mechanism of environmental anchoring, where past lived experiences serve as a reference point for future residential choices. We develop a discrete choice model of residential sorting that incorporates reference-dependent preferences, positing that individuals discount the utility of amenities, such as air quality or climate, when they diverge substantially from their formative baseline. This framework oers a micro-foundation for the intergenerational persistence of environmental exposure: individuals from low-amenity origins may undervalue improvements in environmental quality, leading them to self-sort into similarly disadvantaged locations. We test this theory empirically using an augmented gravity model of U.S. county-to-county migration ows from 2013 to 2017. By constructing a measure of environmental distance between origin and destination, we isolate the role of environmental anchoring in migration decisions. We nd robust evidence that migration ows are signicantly larger between counties with similar environmental and socioeconomic proles, even after controlling for physical distance and economic opportunities. These ndings suggest that spatial inequality is reinforced not only by structural constraints but by internalized preferences, implying that policies aiming to promote intergenerational mobility must account for the behavioral stickiness of past environmental exposure.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 35
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea26:404509

DOI: 10.22004/ag.econ.404509

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