When the Air Doesn't Move the Data: The Thermal Inversion Instrument in Developing Countries

Hiroyuki Yamada
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Hiroyuki Yamada: Keio University

No DP2026-018, Keio-IES Discussion Paper Series from Institute for Economics Studies, Keio University

Abstract: Thermal inversions have become the standard instrument for estimating the causal effect of air pollution, underpinning at least 81 published studies of health, labor, firm, and crime outcomes. Seventy-seven percent of those studies concern China, and none concerns Sub-Saharan Africa. This paper examines whether the design can be transported to the regions where pollution research is expanding fastest. We link 120,820 children in 26 Sub-Saharan African countries and 128,919 in India, Bangladesh, and Nepal to 0.01° satellite PM2.5 and to ERA5 temperature profiles measured at local dawn, and we estimate a single two-stage least squares specification six times, changing only the definition of the inversion instrument. Five of the six definitions come from published practice, and the sixth is an elevation-robust variant of our own. In the African sample, we find that all six first stages are strong and correctly signed (F=57-356). However, the second stages split by instrument family. Pressure-level definitions give positive but insignificant effects on child respiratory illness, whereas surface-layer definitions, the modal implementation in the literature, give significant negative ones. Over-identification tests reject the cross-family pairings of the count and continuous instruments (p

Keywords: thermal inversion; instrumental variables; air pollution; child health; external validity; Sub-Saharan Africa; South Asia (search for similar items in EconPapers)
JEL-codes: C26 I15 O13 Q53 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2026-08-18
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