Meredith Fowlie, Edward Rubin, and Reed Walker “Bringing Satellite-Based Air Quality Estimates Down” (February 2019) (Revised Version Published in American Economic Review Papers and Proceedings, 109: 283–288, May 2019) | WP-300R

We use state-of-the-art, satellite-based PM2.5 estimates to assess the extent to which the EPA’s existing, monitor-based measurements over- or under-estimate true exposure to PM2.5 pollution. Treating satellite-based estimates as truth implies a substantial number of “policy errors” — over-regulating areas that comply with air quality standards and under-regulating other areas that appear to violate standards. We investigate the health implications of these apparent errors and highlight the importance of accounting for prediction error in satellite-based estimates. Uncertainty in “policy errors” increases substantially when we account for these underlying prediction errors.