Does Environmental Policy Affect Income Inequality? Evidence from the Clean Air Act

Akshaya Jha, Peter Matthews and Nicholas Muller

AEA Papers and Proceedings, 2019, vol. 109, 271-76

Abstract: This paper quantifies the impact of environmental policy on income inequality. We focus on the Clean Air act and the National Ambient Air Quality standards for fine particulate matter and ozone. Using a matched difference-in-differences estimator, we find evidence that both standards increased inequality in market income and a measure of income that deducts per-capita air pollution damage from adjusted gross income. While pollution standards can reduce pollution levels and thus result in significant environmental benefits in aggregate, our findings suggest that these standards appear to distort the distribution of economic resources in complex, and at times unfortunate, ways.

JEL-codes: D31 D63 K32 Q53 Q58 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/pandp.20191062
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Citations: View citations in EconPapers (9)

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