Inequality, Information Failures, and Air Pollution / Catherine Hausman, Samuel Stolper.

Format:

Book

Author/Creator:

Hausman, Catherine.

Contributor:

National Bureau of Economic Research.

Stolper, Samuel.

Series:

Working Paper Series (National Bureau of Economic Research) no. w26682.

NBER working paper series no. w26682

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

Research spanning several disciplines has repeatedly documented disproportionate pollution exposure in low-income communities and communities of color. Among the various proposed causes of this pattern, those that have received the most attention are income inequality, discrimination, and firm costs (of inputs and regulatory compliance). We argue that an additional channel - information - is likely to play an important role in generating disparities in pollution exposure. We present multiple reasons for a tendency to underestimate pollution burdens. Using a model of housing choice, we then derive conditions under which "hidden" pollution leads to an inequality - even when all households face the same lack of information. This inequality arises when households sort according to known pollution and other disamenities, which we show are positively correlated with hidden pollution. To help bridge the gap between environmental justice and economics, we discuss the relationship between hidden information and three different distributional measures: exposure to pollution; exposure to hidden pollution; and welfare loss due to hidden pollution.

Notes:

Print version record

January 2020.