My research covers topics in environmental economics and industrial organization.
Escalation of Scrutiny: The Gains from Dynamic Enforcement of Environmental Regulations (with Gautam Gowrisankaran and Ashley Langer), revise and resubmit at the American Economic Review.
The U.S. Environmental Protection Agency uses a dynamic approach to environmental enforcement for air pollution, with repeat offenders subject to high fines and designation as high priority violators (HPV). We estimate the benefits of dynamic monitoring and enforcement by developing and estimating a dynamic model of a plant and regulator, where plants decide when to invest in pollution abatement technologies. We use a fixed grid approach to estimate random coefficient specifications. Investment, fines, and HPV designation are very costly to most plants. Eliminating dynamic enforcement would have large adverse impacts on the number of high priority violators and pollutants emitted.
Environmental regulators often use dynamic enforcement, which bases penalties and enforcement effort on plants' past compliance history, to improve compliance and decrease emissions when enforcement resources are limited. Using plant-level data from the EPA, I exploit an unexpected shift in the use of dynamic enforcement by environmental regulators in Florida. I find that all Florida plants decreased emissions and improved compliance following an increase in penalties for plants classified as having Priority Violations. Consistent with the theory of dynamic enforcement, the largest improvements were observed amongst plants previously classified with Priority Violations. These results are robust to the use of control plants from nearby southern states as well as control plants selected via a matching algorithm. The paper’s findings suggest that the strategic allocation of regulatory resources via dynamic enforcement is an important determinant of compliance and emissions in polluting industries.
Flaring and Health (with Anatolii Kokoza) Draft Available Upon Request
In this paper we quantify the effect of exposure to flared natural gas on health. Using a unique dataset of well location, flaring, weather, and patient level hospital visits with the five digit zip and diagnostic codes for each patient in the state of North Dakota. We find that exposure to flared natural gas has a negative causal impact on respiratory health. This result accounts for the endogeneity of flaring exposure by using the number of upwind wells connected to a constrained processing plant as an instrument. These results inform current policy debates on the benefits of restrictions on natural gas flaring and the externalities associated with oil activity.