Thursday, June 27, 2019

“Equity and the Environment: The Role of Imperfect Information”
Catherine Hausman (University of Michigan)
Joint with Samuel Stolper (University of Michigan)


Research spanning several disciplines has repeatedly documented disproportionate pollution exposure among the poor 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 inequities in pollution exposure. We present descriptive statistics on pollution in the United States that suggest a tendency to underestimate pollution burdens. Using a model of housing choice, we then show how “hidden” pollution leads to an inequity — even when all households face the same information.

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