Days of Haze: Environmental Information Disclosure and Intertemporal Avoidance Behavior

Joshua Graff Zivin and Matthew Neidell

No 14271, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper, we investigate the dynamics of informational regulatory approaches by analyzing the impact of smog alerts issued on consecutive days on discretionary outdoor activities in Southern California. Short-run adjustments to transitory risk entail costs that are likely to influence the set of evasive actions pursued by those at risk. Our results confirm that the cost of intertemporally substituting activities is increasing over time: when alerts are issued on two successive days, any response on the first day has largely disappeared by the second day. Small reprieves from alerts, however, reset these costs. Our findings imply that a time-varying decision rule that accounts for multiple day air quality forecasts may improve social welfare.

JEL-codes: D80 I18 Q53 (search for similar items in EconPapers)
Date: 2008-08
New Economics Papers: this item is included in nep-env
Note: EEE EH
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Published as Graff Zivin, Joshua & Neidell, Matthew, 2009. "Days of haze: Environmental information disclosure and intertemporal avoidance behavior," Journal of Environmental Economics and Management, Elsevier, vol. 58(2), pages 119-128, September.

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Journal Article: Days of haze: Environmental information disclosure and intertemporal avoidance behavior (2009)
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