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Essays on the Economics of the 1956 Clean Air Dissertations in Economics 2021:1 Nanna Fukushima This thesis consists of three essays in environmental and health economics. Essays on the Economics of the The UK Clean Air Act, Black Smoke, and Infant Mortality examines 1956 Clean Air Act the impact of banning coal on air quality and infant mortality and estimates the effect of smoke pollution on post-war infant mortality. Act Air the 1956 Clean the Economics of on Essays Nanna Fukushima A Fine Solution to Air Pollution? explores the effects of regulation on air pollution in urban areas in England when the monetary punishment if convicted is doubled. Environmental Regulation and Firm Performance investigates the effect of environmental regulation in England in the 1960s–70s on changes in employment and the entry and exit of manufacturing plants. Nanna Fukushima holds a B.Sc. and an M.Sc. in Economics from Stockholm University. Her research interests in economics include environmental economics and health economics. ISBN 978-91-7911-558-6 ISSN 1404-3491 Department of Economics Doctoral Thesis in Economics at Stockholm University, Sweden 2021 Essays on the Economics of the 1956 Clean Air Act Nanna Fukushima Academic dissertation for the Degree of Doctor of Philosophy in Economics at Stockholm University to be publicly defended on Monday 27 September 2021 at 15.00 in sal G, Arrheniuslaboratorierna, Svante Arrhenius väg 20 C. Abstract 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. Keywords: Environmental economics, Air pollution, Clean Air Act 1956, Environmental regulation, Infant health, Firm heterogeneity, Firm behaviour, Regulation compliance, Economic history. Stockholm 2021 http://urn.kb.se/resolve?urn=urn:nbn:se:su:diva-194653 ISBN 978-91-7911-558-6 ISBN 978-91-7911-559-3 ISSN 1404-3491 Department of Economics Stockholm University, 106 91 Stockholm ESSAYS ON THE ECONOMICS OF THE 1956 CLEAN AIR ACT Nanna Fukushima Essays on the Economics of the 1956 Clean Air Act Nanna Fukushima ©Nanna Fukushima, Stockholm University 2021 ISBN print 978-91-7911-558-6 ISBN PDF 978-91-7911-559-3 ISSN 1404-3491 Printed in Sweden by Universitetsservice US-AB, Stockholm 2021 Till Georg och Edith. Acknowledgments Finishing a PhD is a lonely task and perhaps even more so when all research projects are single-authored. For this reason, the friendship with fellow PhD students has been invaluable, and I have many to thank for making the years fun, engaging, and less miserable. In reverse chronological order, I would especially like to extend my gratitude to Roza for her kind spirit, and without whom, I would have been clueless about the job market process. To Ulrika, who, despite being a mother of young children, never seems to fail to take on the responsibility of arranging and organizing meetings and happenings with a smile on her face. To Erik, my dear roommate, whom I got along with from day one, and I have so much to thank. I miss our long conversations and your humor and kindness. I am also extremely grateful to Vanessa, Felicia, Carl-Johan, Erik, Valentina, Jürg, Nathan, who made the first year not only tolerable but full of laughter. And to Anita, Louise, Daniel A, Daniel K, Tamara, Jens, Elisabet and many more clever and funny colleagues I had the pleasure to get to know. You are all amazing. I also like to thank Evelina and Jenny, who I was lucky to befriend long before obtaining our PhDs in economics. I am so very proud of you and amazed that we all got to this stage and are looking forward to the opportunity to start working on projects together. The graduate year that stands out from the rest is the year that I spent at UChicago and the friends I made while there. Elena – my foodie friend – thank you for sharing your office with me, for your wit, humor, kindness, and Sardinian delicacies! To Ingvil, Magne, Linda, Manudip, Joanna, Rob, Ingrid, Ola, and many others for your hospitality and friendship. The restaurant visits, girls' nights, weekend brunches are all very dear memories to me. Asking David to become my adviser was probably the wisest decision of mine during my studies. Thank you, David, for all your sensible and insightful advice and for taking the time to read through my drafts at times when they were yet barely readable documents. Thank you, Peter N. Although you became my co-adviser later, I feel like you've been on board much longer. I appreciate the many great suggestions and pieces of advice and your efforts to reach out and check in on me. I am also very grateful to Peter F for many issues, small and large, and whose integrity and intelligence are an inspiration. Mårten, thank you for believing in me and making my journey towards a PhD possible. I am also very grateful to Rikard for the support and wisdom you have provided me directly and indirectly. To Anders, I am indebted both professionally but also privately. I am often amazed by how fast you can provide excellent advice to my questions related to my projects. While there are likely more peaceful ways to spend an evening or time off from work, our shared interest in world affairs and discussions is always stimulating and inspiring. Also, thank you for being a caring and loving father. No one can blame us for not working hard! To my mother. Thank you for your love and for raising me to always believe in myself, to search deeper to see what lies underneath, and to love heated debates. My sister, for your wisdom and for being a living example of what it means to live a meaningful life. My brother, for your excellent dry sense of humor, unconditional love, and divine wines! I am grateful to my Dad, who passed away much too early but has never ceased to inspire me through my own and others' many loving memories of you. Thank you to all my dear friends from all walks of life who have inspired me, encouraged me, supported me, and loved me. You are many, for which I am truly blessed. Finally, thank you mother earth, for without you there would be nothing. Stockholm, August 2021 Nanna Fukushima Sammanfattning Den här avhandlingen består av tre fristående empiriska uppsatser inom miljö- och hälsoekonomi. Uppsats 1: Clean Air Act, sotpartiklar och spädbarnsmortalitet (The UK Clean Air Act, Black Smoke, and Infant Mortality) Denna uppsats undersöker empiriskt effekten av 1956 års förordning om luftförorening (1956 Clean Air Act) i Storbritannien på luftföroreningshalter samt dess inverkan på spädbarnsmortalitet mellan åren 1957–1973. Studien baseras på ett unikt dataset och mäter effekten av en gradvis expansion av förbud mot eldning med kol i hem och industrier inom särskilt angivna områden (smoke control areas). För att undersöka det kausala sambandet mellan förbud mot koleldning och luftkvalitét samt spädbarnsmortalitet kontrollerar jag för lokala och temporära skillnader samt utbredningsgraden av SCA för att sedan jämföra skillnaden i utfall mellan vinter- och sommarsäsong i en så kallade triple- difference modell där jag använder mig av skillnaden i efterfrågan på kol vilket innebar att förbudet bara hade effekt under den kalla årstiden. Resultaten tyder på att områderna hade en stor påverkan på den lokala luftfkvalitén samt spädbarnsmortalitet under vinterhalvåret. Effektstorleken motsvarar den genomsnittliga skillnaden i luftföroreningar och spädbarnsmortalitet mellan säsongerna. För att skilja på minskningen i spädbarnsmortalitet orsakad av luftföroreningar från andra spädbarnsmortalitetsreducerande faktorer utnyttjar jag skillnaden i luftkvalitén orsakad av förbudet mot kol i en s.k.
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