Air pollution and unleaded gasoline in Mexico City

Bríd Hanna and Alethia Jimenez Garcia ()
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Alethia Jimenez Garcia: Monterey Institute of International Studies

Economics Bulletin, 2008, vol. 18, issue 3, 1-13

Abstract: Using a spline regression model and a monthly time series from January 1989 to December 2004 for Mexico City, we test for changes in the time trend for air pollution that coincide with the introduction of a new and relatively expensive unleaded gasoline in September 1990. At this time, new cars were required to have catalytic converters and leaded gasoline was significantly cheaper than unleaded gasoline. The price difference provided an incentive to use leaded gasoline in automobiles that were not suited to its use, thereby increasing emissions. We find that there was a statistically significant and adverse change in the pollution time trend after September 1990 that persisted until leaded gasoline was eliminated from the Mexico City market eight years later. The use of leaded gasoline in new cars is a possible explanation for this result.

JEL-codes: Q0 R0 (search for similar items in EconPapers)
Date: 2008-07-16
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