Essays on the Economics of the 1956 Clean Air Act

This thesis consists of three essays in environmental and health economics. The UK Clean Air Act, Black Smoke, and Infant Mortality This paper estimates the effects of the 1956 UK Clean Air Act on infant mortality. Using novel data, I exploit the seasonality in demand for coal to analyze the effects of a staggered expansion of a ban on local smoke emission. The findings show that the policy eliminated the seasonal difference in air quality as well as infant mortality. According to my instrumental variables estimates, the reduction in air pollution between 1957 and 1973 can account for 70 % of the observed decline in infant mortality during the same period. The results are relevant to explain the fast decline in post-war infant mortality in developed countries and understand the effect of pollution on infant mortality in many developing countries. A Fine Solution to Air Pollution? This paper studies the effect of an exogenous change in air pollution regulation enforcement on regulation compliance. I exploit the spatial and temporal variation in the roll-out of zonal bans on smoke from coal in densely populated areas in England between 1963 – 1973 to study the effect of regulation on air pollution when the monetary punishment if convicted is doubled. I find that the increase in fine size increased the effect of the regulation on air pollution by 37 percent. However, evidence suggests that the poorest households disproportionally carried the cost of the marginal improvement in air quality from an increase in fine. The findings highlight the distributional concerns associated when designing an effective environmental regulation. Environmental Regulation and Firm Performance This paper investigates the effect of environmental regulation in England in the 1960 – 70s on changes in employment and the entry and exit of manufacturing plants. It matches 1 km2 grid resolution plant data for multiple years with novel data on the location and timing of a roll-out of a ban on bituminous coal, the leading source of energy and heating in industry at the time. I show that the regulation negatively affected employment in low-productive plants but increased the probability of survival, employment, and the entry of high-productive plants. I present a simple theoretical model with heterogeneous firms and find empirical evidence in line with model predictions