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Neighborhood Demographics and the Distribution of Hazardous Waste Risks: An Instrumental Variables Estimation

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Abstract

This paper examines whether the marginal price of risk reduction varies by the demographic characteristics of neighborhoods. Using an instrumental-variables approach to control for the two-way relationship between housing prices and environmental risk, the paper finds that the marginal valuation of risk reduction is higher in high-education and high-income neighborhoods. The results also suggest that environmental risks are greater in neighborhoods with low-priced houses and in neighborhoods with low levels of collective action, suggesting that polluters consider these characteristics when making their siting decisions.

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  1. University of California, Berkeley and Georgetown University, 140 Warren Hall, Berkeley, CA, 94720–7360

    Ted Gayer

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  1. Ted Gayer
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Gayer, T. Neighborhood Demographics and the Distribution of Hazardous Waste Risks: An Instrumental Variables Estimation. Journal of Regulatory Economics 17, 131–155 (2000). https://doi.org/10.1023/A:1008139927218

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