Working Papers
Disentangling Information Frictions and Endogenous Amenities in Residential Sorting Models: Evidence from Changes in Noise Pollution Exposure (Link)
This paper addresses two challenges to estimating the Marginal Willingness To Pay (MWTP) for residential exposure to noise pollution. First, ignoring information frictions among home buyers may bias estimates of the MWTP for an amenity. Second, changes in the amenity of interest may affect other endogenous amenities, further complicating the identification of MWTP. I address both challenges by using a novel instrumental variable based on spatial variation in the salience of noise pollution caused by hourly variation in flight paths due to wind direction. My preliminary results suggest disregarding information friction or endogenous amenities causes nontrivial biases in MWTP estimates. I find the MWTP to avoid 1 dB of noise pollution is approximately $4,742. I find that 80% of households exhibit a negative value of misinformation. The mean value of misinformation is -$118, with a total annualized value of -$2.2 million. Furthermore, households with a head of the family over 65 face significantly higher misinformation costs.
Valuing Noise Pollution in a Residential Sorting Model: Evidence from Changes to Flight Paths (Link)
Noise pollution from airplanes can reduce property values by creating a disamenity for residents. I estimate the effect of noise pollution on residential properties in the Phoenix metropolitan area, using quasi-random changes in commercial flight paths to and from Phoenix Sky Harbor Airport. Then, I estimate the parameters of a residential sorting model with heterogeneous preferences over noise and other amenities. The identifying variation comes from the unexpected implementation of new flight paths and instruments for time-varying housing prices. I find that the average marginal willingness to pay to avoid noise pollution is $3,038 per dB (decibel) and varies from $2,500 to $3,500 per dB, based on household demographics. A Pigouvian tax on airplane passengers to compensate residents for noise pollution is approximately $16 per one-way flight, three times the carbon tax for a one-way trip from New York to San Francisco.
Capitalization of Noise Pollution and Environmental Justice: Evidence from Changes to Flight Paths (Link)
This paper analyzes how a quasi-random change in noise pollution was capitalized into housing prices in a major metropolitan area. The Federal Aviation Administration (FAA) modified arrival and departure routes around Phoenix Sky Harbor airport in September 2014 without notifying the public. The goal was to reduce fuel consumption and carbon emissions. Overnight, noise increased dramatically in some neighborhoods and decreased dramatically in others. I leverage these unexpected changes in noise to identify parameters of hedonic property value models. The results imply that a 1 decibel increase in noise pollution reduced property values by about 1%. The total monetized value of capitalized noise externalities exceeded the value of fuel savings and reduced carbon emissions. I also examine the distributional impacts of the flight path changes by race, income, and other socioeconomic characteristics of residents. I find that the computer-generated flight paths initially benefited neighborhoods with more Black residents, but a court-ordered reversal left them worse off than before the first change.
Work in Progress
Pollution, Population, and Production: A Structural Analysis of Wildfire Smoke and Spatial Sorting (with Christopher Knittel)
Wildfires in the U.S.—especially in California—are increasing in frequency and severity, with profound social and economic consequences. This study examines the indirect impact of wildfire smoke on household migration and firm performance. Using variation in PM2.5 exposure from the 2018 California wildfires, we combine smoke data with household-level mobility and demographics, as well as firm-level data on employment, sales, and survival from 2013 to 2019. A difference-in-differences analysis reveals that smoke exposure resulted in the outmigration of approximately 68,000 households, with older adults and families with children being the most likely to relocate. On the firm side, smoke exposure resulted in a 2.9% decline in employment, a 4.3% drop in sales, and a 6.8% decrease in the number of operating firms, disproportionately affecting small businesses. To understand the mechanisms behind these responses, we estimate a residential sorting model with endogenous amenities. We find a mean marginal willingness to pay (MWTP) of 2.8% of the property value to avoid exposure to smoke, and older households show MWTPs as high as 11%. High-income households are associated with the accumulation of more health amenities, implying that their migration out of smoke-affected areas can reduce demand for health services and change the composition of local firms.
Estimation of Electricity Access and Demand in the Republic of Yemen
The conflict in Yemen in 2019 significantly reduced access to reliable electricity. This study surveyed 1,052 Yemeni consumers to assess their electricity access and preferences for improvements. A stated choice experiment with randomized attributes was employed to estimate household Willingness to Pay (WTP) for various measures of electricity access, including consumption level and daily availability. The survey revealed that 82%, 18%, and 14% of households have access to electricity from solar, private grids, and national grids, respectively. Consumers are willing to pay $1.80 monthly for an additional hour of electricity availability. Moreover, they expressed a willingness to pay $6.50 for the capacity to power small, low-consuming appliances such as televisions, washing machines, and refrigerators and $16.60 for both low-consuming and high-consuming appliances, such as air conditioners or heaters. Further, consumers are willing to pay $13.40 to avoid losing access to electricity apart from the basic lighting and phone charging.
Markets for Water as a Heterogenous Commodity (with Michael Hanemann)
Water is often perceived as a homogenous commodity, yet its heterogeneity becomes evident through various legal entitlements, spatial trade boundaries, and transaction costs. We investigate this heterogeneity in one of the most dynamic water markets in the U.S., the Front Range of the Rocky Mountains north and east of Denver. Additionally, we estimate households' willingness to pay for access to municipal water. This analysis leverages spatial and temporal variations in water access from the municipality.
Others
"Specifications and Guidelines for Continuous Emissions Monitoring System (CEMS) for PM Measurement in Emissions Trading Scheme" published by Central Pollution Control Board, India (2013-14). Link
"Risk-Return Analysis of Sectorial Portfolio of Stock", Published at Economics, Management and Financial Markets (Addleton Academic Publishers, New York) (2012). Link