Dissertation Chapters

Dissertation: Three Essays on the Economics of Water Quality in the United States
Committee: Robert Mendelsohn (Chair), Nicholas Muller, James Saiers


"Estimating the Effects of Nutrients on Water-Based Recreational Uses in the United States: An Instrumental Variables Approach" (Job Market Paper)

Abstract:
Although the U.S. spends tens of billions of dollars a year controlling water pollution, there is little empirical evidence of comparable benefits.  This study argues that measurement error in national pollution data has caused benefits to be underestimated.  Using an instrumental variables approach, the study shows that there are substantial benefits associated with reducing nutrient pollution, especially phosphorus concentrations in freshwater systems.  Instrumental variable estimates of the effects of phosphorus on recreational use are an order of magnitude larger than traditional cross-sectional estimates.  The study uses a carefully measured state-level pollution dataset to show that this difference is consistent with an estimate of measurement error in national water pollution data.


"An Integrated Assessment Framework to Measure the Damages from Water Pollution in the United States"

Abstract:
Motivated by the ambitious goals of the Clean Water Act of 1972, economists have put forth significant efforts  to measure the economic damages of water pollution in the United States.  The prevailing approach in the literature relies upon national stated preference surveys to estimate what individuals are willing to pay for certain levels of water quality.  These estimates are often combined with a hydrologic model to measure the total benefits of achieving substantial changes in water quality.  Building upon similar advances in integrated assessment models for air pollution, this paper proposes a conceptual framework for an integrated assessment model that focuses on recovering marginal damages of water pollution in the United States.  Potential sources of data and the main obstacles to build this type of model are discussed.


"The Effectiveness of Overlapping Pollution Regulation: Evidence from the U.S. Ban on Phosphate in Dishwasher Detergent" (With Alex W. Cohen)

Abstract:
The management of pollution is often complicated by a variety of policies set within and across various levels of government.  Recent work has shown that differences in federal and state policies have critical consequences for pollution control in the U.S.  The contribution of this paper is to show that important policy interactions also occur when pollution policies are left uncoordinated within states.  Our work explores the case of recent state-level bans on phosphates in household dishwasher detergent.  An oft-cited objective of this legislation is to reduce phosphorus loadings to waterways.  Using a simple model of wastewater treatment behavior, we show that the effectiveness of the ban critically depends upon existing pollution regulations.  In particular, when faced with a phosphorus emissions standard, facilities have no incentive to further reduce emissions.  We test our model using facility, month level effluent pre- and post-ban to identify the effect of the ban on facilities with and without phosphorus limits.  We find that phosphorus effluent concentration levels dropped 14.5 percentage points more at no limit versus limit facilities as a result of the ban.  As further validation of our model, we estimate an elasticity of effluent concentration with respect to influent concentration for a select group of facilities.  As expected, facilities without limits display a much greater response to exogenous shocks to influent.  These results reinforce the need for more coordination in pollution policy design.