Juan Palacios
Assistant Professor | Real Estate Economics
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WORKING PAPERS
Indoor Air Quality and Learning: Evidence from a Large Field Study in Primary Schools
joint with Nicolas Duran (UCL), Piet Eichholtz (Maastricht University) and Nils Kok (Maastricht University)
Governments devote a large share of public budgets to construct, repair and modernize school facilities. However, little is known about whether investments in the physical condition of schools translate into student achievements. In this study, we report the results of a large field study, providing quasi-experimental evidence on the implications for student performance of poor environmental conditions inside classrooms - key performance measure of school infrastructure, and a common indicator guiding investments in school facilities. We continuously monitor the environmental conditions (i.e. CO2, fine particles, temperature, humidity) in the classrooms of 5,500 Dutch children over three school years, and link them to their scores in over 37,000 nationally standardized tests. Using a fixed-effects strategy, relying on within-pupil changes in environmental conditions, we find that exposure to poor indoor air quality during the school term preceding the test is associated with significant performance drops. We document that one standard deviation increase in average daily peak CO2 during the school term leads to a 0.16 standard deviation drop in test scores. Our results add to the ongoing debate on the determinants of student human capital accumulation, highlighting the role of physical capital in affecting learning outcomes.
Presentations: IZA Workshop Environment and Labor Markets, American Real Estate and Urban Economics Association Annual meetings, European Association of Labor Economists annual conference, Maastricht University Learning & Work Seminar, Annual Conference of the European Society for Population Economics, Seminar University Southern California, Online Seminar American Association of Real Estate and Urban Economics.
Health Implications of Housing Programs: Evidence from a population-wide weatherization program
joint with Steffen Kuenn (Maastricht University)
Draft Coming Soon
Can better housing protect us from extreme weather conditions? Although economists and policymakers are certain about the health implications of housing upgrades, empirical evidence is largely missing or based on small-scale experiments in developing countries. This study provides population-representative quasi-experimental estimates based on the renovation program which renovated half of the East German housing portfolio in the aftermath of the German reunification. During the 1990s, the German government devoted significant financial resources to upgrade the insulation and heating systems of over 3.6 million dwellings in East Germany. We link the renovations to individual health of occupants using the German Socio-Economic household Panel (SOEP) as well as administrative records from the German hospital statistics. Relying on a fixed effect strategy, exploiting the staggered roll-out of the renovation program, our results show that an improvement in housing quality enhances the health of vulnerable groups. First, we find a reduction in the risk of cardiovascular problems for older individuals (45 years or older), driven by days with extremely high and low ambient temperatures. Second, we detect adverse health effects for pregnant women and neonates during the renovation phase. Our findings have strong policy implications and have to be considered when planning (public) weatherization programs.
Health Implications of Housing Programs: Evidence from a population-wide weatherization program
joint with Steffen Kuenn (Maastricht University)
Draft Coming Soon
Can better housing protect us from extreme weather conditions? Although economists and policymakers are certain about the health implications of housing upgrades, empirical evidence is largely missing or based on small-scale experiments in developing countries. This study provides population-representative quasi-experimental estimates based on the renovation program which renovated half of the East German housing portfolio in the aftermath of the German reunification. During the 1990s, the German government devoted significant financial resources to upgrade the insulation and heating systems of over 3.6 million dwellings in East Germany. We link the renovations to individual health of occupants using the German Socio-Economic household Panel (SOEP) as well as administrative records from the German hospital statistics. Relying on a fixed effect strategy, exploiting the staggered roll-out of the renovation program, our results show that an improvement in housing quality enhances the health of vulnerable groups. First, we find a reduction in the risk of cardiovascular problems for older individuals (45 years or older), driven by days with extremely high and low ambient temperatures. Second, we detect adverse health effects for pregnant women and neonates during the renovation phase. Our findings have strong policy implications and have to be considered when planning (public) weatherization programs.
Presentations: Association of Environmental and Resource Economists (ASSA meetings)*, IZA Workshop of Environment and Labor Markets, European Association of Health Economics, American of Real Estate and Urban Economics Association (ASSA meetings), European Association of Labor Economists annual conference, Maastricht University Learning & Work Seminar, Annual Conference of the European Society for Population Economics, SOEP Conference (DIW Berlin), VfS Annual Conference.
*Scheduled
Fear and Behavior: Measuring Expressed Fear and Its Implications for Urban Mobility in Times of COVID-19
joint with Jude Bayham (Colorado State University), Yichun Fan (MIT), Eli Fenichel (Yale), and Siqi Zheng (MIT)
Draft Coming Soon
Economic behavior is driven by mostly unobserved factors, such as personality traits or affective states, which determine preference orderings and individual behavior. While economists and psychologists have developed numerous experiments and survey instruments to measure those individual attributes in the past decades, there is still a scarcity of scalable datasets available for researchers and policy makers to connect subjective traits with real world behaviors. This study uses social media platforms as an unsolicited poll to infer individuals' emotional state, and link it to individual behavior. We construct a unique dataset including the universe of posts [N=18.55 Million] of a cohort of over 500,000 individuals located in China from January 1st 2019 to July 30th 2021, using micro data from Sina-Weibo, the largest social media platform in the country. We use state-of-the-art Natural Language Processing (NLP) tools to compute the emotional state expressed in each post by the subjects in our sample. Using this data, we classify individuals based on their average degree of fear expression in their social media posts during the peak of a COVID-19 virus outbreak in the country, to reveal their underlying latent emotional state. We then link it to their reduction in visitation rate to out-of-home venues after a COVID-19 outbreak using a difference-in-differences design. The results display the predictive power of fear on behaviors, showing quantitatively significant and long-lasting effects: individuals with an average levels of expressed fear above their city median display a 3.9% higher reduction in all out-of-home activities than individuals with levels below median fear within the same city for months in the aftermath of COVID-19 outbreaks. High risk venues like restaurants and indoor entertainment showed the largest drops in visits-14.9% additional reduction of high fear people, which remained stable for months.
Presentations: Harvard*, MIT, American Real Estate and Urban Economics Association Annual meetings.
*Scheduled
PUBLICATIONS IN REFEREED JOURNALS
Indoor Air Quality and Strategic Decision Making
joint with Steffen Kuenn (Maastricht University), Nico Pestel (IZA)
Forthcoming, Management Science, IZA Discussion Paper #12632
Decision-making on the job is becoming increasingly important in the labor market, where there is an unprecedented rise in demand for workers with problem solving and critical thinking skills. This paper investigates how indoor air quality affects the quality of strategic decision-making based on data from official chess tournaments. Our main analysis relies on a unique dataset linking the readings of air quality monitors inside the tournament room to the quality of 30,000 moves, each of them objectively evaluated by a powerful artificial intelligence based chess engine. The results show that poor indoor air quality hampers players' decision-making. We find that an increase in the indoor concentration of fine particulate matter (PM2.5) by 10 μg/m3 (corresponding to 75% of a standard deviation in our sample) increases a player's probability of making an erroneous move by 26.3%. The decomposition of the effects by different stages of the game shows that time pressure amplifies the damage of poor air quality to the players' decisions. The results highlight the costs of poor air quality for highly skilled professionals faced with cognitively demanding decisions under time pressure.
Presentations: IZA Workshop Environment and Labor Markets, IZA Summer School, LSE Workshop in Environmental Economics, American Economic Association ASSA meetings Poster Session, MIT SUL Talks, Maastricht University Learning & Work Seminar, IZA Brown Bag seminar, Tinbergen Institute, University of Calirfornia San Diego (UCSD), University of Rotterdam, EALE SOLE AASLE World Conference, European Association of Environmental and Resource Economists, University of Passau, Verein für Socialpolitik, University of Oslo, Annual Conference of the European Society for Population Economics.
CURRENT WORKING PAPERS
Encouraging the resumption of economic activity after COVID-19: Evidence from a large scale field experiment [lead author]
joint with Yichun Fan (MIT), Erez (MIT), Jianghao Wang (CAS), Yuchen Chai (MIT), Weizeng Sun (CUFE), David Rand (MIT), and Siqi Zheng (MIT)
Accepted by Proceedings of the National Academy of Science (PNAS)
As the COVID-19 pandemic comes to an end, governments find themselves facing a new challenge: motivating citizens to resume economic activity. What is an effective way to do so? We investigate this question using a field experiment in the city of Zhengzhou, China, immediately following the end of the city's COVID-19 lockdown. We assessed the effect of a descriptive norms intervention providing information about the proportion of participants' neighbors who have resumed economic activity. We find that informing individuals about their neighbors' plans to visit restaurants increases the fraction of participants visiting restaurants by 12 percentage points (37%), amongst those participants who underestimated the proportion of neighbors who resumed economic activity. Those who overestimated did not respond by reducing restaurant attendance, (the intervention yielded no `boomerang' effect), thus our descriptive norms intervention has yielded a net positive effect. We explore moderators, risk perceptions, and compare the results to an intervention for parks, which were already perceived as safe. All of these analyses suggest our intervention worked by reducing the perceived risk of going to restaurants.
Presentations: Urban Economic Association Annual Meetings, MIT SUL Talks.
Global evidence of human well-being alterations during the COVID-19 pandemic
joint with Jianghao Wang (CAS), Yichun Fan (MIT), Nicolas Guetta (MIT), Yuchen Chai (MIT), Nick Obradovich (Max Planck Institute), Chenghu Zou (CAS), and Siqi Zheng (MIT)
Accepted by Nature of Human Behavior
The COVID-19 pandemic has created unprecedented burdens on people’s physical health and subjective well-being. While countries worldwide have developed platforms to track the evolution of COVID-19 infections and deaths, frequent global measurements of affective states to gauge the emotional impacts of pandemic and related policy interventions remain scarce. Using 654 million geotagged social media posts in over 100 countries (74% total global population), coupled with state-of-the-art natural language processing techniques, we develop a global dataset of expressed sentiment indices to track regional affective states on a daily basis. We present two motivating applications using data from the first wave of COVID-19 (from January 1 to May 31 in 2020). First, using regression discontinuity in time methods, we obtain consistent evidence that COVID-19 outbreaks caused steep declines in expressed sentiment globally, followed by asymmetric, slower recoveries. Second, applying synthetic control methods, we find moderate to no effects of lockdown policies on expressed sentiment, with large heterogeneity across countries. This study shows how social media data, when coupled with machine learning techniques, can provide real-time measurements of affective states to support evidence-based policy decision-making.
joint with Yichun Fan (MIT), Rachel Luo (MIT), Mariana Arcadia (MIT), and Siqi Zheng (MIT)
published in Environmental Research Letters, volume 16, 2021
Previous literature suggests that active commuting has substantial health benefits. Yet, in polluted regions, it can also cause additional health risks by increasing riders' pollution exposure and raising their inhalation rate. We examine the effect of perceived air pollution on stated commuting choices using an on-site survey experiment for 2285 non-automobile commuters in Zhengzhou, a heavily polluted city in central China. We integrate a sequential randomized controlled trial in a survey where individuals in the treatment group received tailored information on their commuting-related pollution exposure, based on our 2 week peak-hour pollution monitoring campaign across transportation modes in the city. We find that travelers in Zhengzhou have already adopted pollution prevention actions by favoring indoor commuting modes on polluted days. Individuals receiving personalized pollution exposure information by mode further decrease active commuting by 8.4 percentage points (95% CI: 5.1, 11.6), accompanied by a 14.7 percentage points (95% CI: 10.7, 18.3) increase in automobile commuting. Travelers make sub-optimal, overly risk averse choices by reducing active commuting even for trips where epidemiological research suggests the exercise benefits outweigh pollution exposure risks. This pollution avoidance tendency significantly attenuates the effect of policies encouraging active commuting. Our findings show the intricately intertwined relationships between the public health targets of promoting active lifestyles and reducing pollution exposure, and between individual pollution avoidance and societal pollution mitigation.
joint with Nils Kok (Maastricht University) and Piet Eichholtz (Maastricht University)
published in PlosOne, volume 15, issue 8, 2020
Health is a critical factor for the generation of value by workers. Companies bear substantial costs associated with absenteeism and presenteeism among their employees. This study investigates the impact of the environmental conditions in the workplace on the health and job satisfaction of employees, as core factors of productivity. We provide evidence based on a natural experiment, in which 70% of the workforce of a municipality in the Netherlands was relocated to a building with a design focused on sustainability and health and well-being. We construct a longitudinal dataset based on individual surveys of the entire municipality workforce and include measures before and after the move. The estimation results show a significant improvement in the perceived environmental conditions, as well as in the health and well-being of the relocated workers, measured by the drop in incidence of sick building syndrome symptoms. Results are heterogeneous based on age: older groups of employees enjoy larger health impacts. The relocation effects remain persistent in the medium term (two years after the moving date). Importantly, a mediation analysis suggests that the achieved improvements in health and well-being lead to significantly enhanced job satisfaction and a 2% reduction in the prevalence of sick leave.
The impact of housing conditions on health outcomes
joint with Erdal Aydin (Sabanci University), Piet Eichholtz (Maastricht University), and Nils Kok (Maastricht University)
published in Real Estate Economics, volume 5, 2020
We investigate the relationship between housing conditions and health outcomes using a data set that tracks 25,000 German households over 25 years. We document that individuals exposed to poor housing conditions report worse mental and physical health, and experience an 11% increase in doctor visits, increasing to 20% for age groups over 64. The analysis controls for individual, dwelling, and temporal fixed effects, and is robust to changes in socioeconomic status, lifestyle choices, and neighborhood conditions. As a robustness check, we use home renovations as major a trigger of changes in housing conditions. Restricting the analysis to tenants, whose renovations are paid by landlords, we document that home renovations significantly reduce doctor visits, corroborating the findings on home conditions and health outcomes.
Energy efficiency information and valuation practices in rental housing
joint with Andrea Chegut (MIT), Rogier Holtermans (University of Guelph) and Piet Eichholtz (Maastricht University)
published in Journal of Real Estate Finance and Economics, volume 60, 2020
The consensus in the academic literature is that energy efficiency is associated with transaction value premiums, but it is not clear to what extent property appraisers take account of this. We decompose external appraisals of rental housing by international valuation firms in England and the Netherlands in two waves, keeping the samples of valued homes constant between these years. We find a notable change in the behavior of external property appraisers. In England, energy performance does not impact assessed values in 2012, while estimation results for 2015 show a significant discount in assessed values for D-, E- and F- relative to C-labeled dwellings. For the Netherlands, we do not observe a significant relationship between energy efficiency and assessed values in 2010, but in 2015 we find that more energy efficiency leads to higher external valuations.
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