Clean Identification? The Effects of the Clean Air Act on Air Pollution, Exposure Disparities, and House Prices

Lutz Sager and Gregor Singer

American Economic Journal: Economic Policy, 2025, vol. 17, issue 1, 1-36

Abstract: We assess the US 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 0.4 μg/ 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, however, appear larger than previously thought when leveraging regulatory variation.

JEL-codes: D63 K32 Q52 Q53 Q58 R31 (search for similar items in EconPapers)
Date: 2025
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Related works:
Working Paper: Clean identification? The effects of the clean air act on air pollution, exposure disparities and house prices (2025)
Working Paper: Clean identification? The effects of the Clean Air Act on air pollution, exposure disparities and house prices (2023)
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DOI: 10.1257/pol.20220745

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