Essays on the economics of indoor and outdoor environments

This dissertation consists of three chapters on questions in Environmental Economics, addressing policy and health issues in indoor and outdoor environments. In the first chapter, I explores price and quantity policy solutions to externalities that arise from private decisions made over time, focusing on resource extraction as a specific example. In the U.S., mining causes more pollution than any other single industry. I show how tax policy can optimally address a flow externality associated with resource extraction when the policymaker faces asymmetric information in the short run. Chapter 2 investigates whether ordinary exposure to a common indoor air pollutant—Nitrogen Dioxide (NO₂)—affects respiratory health. About 40 percent of occupied homes in the U.S. use gas stoves for cooking, which produce NO₂ as a byproduct of combustion (US Census, 2006), and peak concentrations in homes may reach above 900 ppb when a gas stove is used for cooking (Dennekamp et al., 2001). Permanent or fatal lung damage occurs at NO₂ concentrations greater than 1000 ppb (Samet and Utell, 1990). Previous studies find mixed evidence of negative effects from indoor NO₂ (Basu and Samet, 1999), but exposure may be endogenous in these analyses. I address this problem by developing a physical model of indoor NO₂ concentrations that depends on ventilation decisions and housing characteristics and estimate it using data from the third wave of the National Health and Nutrition Examination Survey. In every model I consider, I find no significant effects of gas stoves on respiratory outcomes. In the final chapter, I combine data on state and local tobacco control ordinances from Americans for Non-smokers Rights Tobacco US Tobacco Control Laws Database with a sample of 35 million births in the U.S. to examine the impact of smoking bans on birth weight and related outcomes. Using difference-in-difference techniques, I identify the effects of state bans net of local bans, as well as the effects of local bans net of state bans. The results suggest less restrictive bans do more to improve birth outcomes than “100% smokefree” bans do, particularly in urban settings.