Abstract

Ambient air pollution monitors are used to track pollution, and the data are used in regulatory settings and research. We identify a principal-agent problem where the local regulator has an incentive to avoid siting monitors in polluted areas but the ability to do so is dampened in nonattainment counties. To test for strategic behavior, we employ satellite-derived pollution estimates to characterize pollution at non-monitored locations. Leveraging the discontinuity at the nonattainment threshold, we find evidence of avoidance by local regulators in attainment counties. Our results suggest that monitoring data in attainment counties systematically understates ambient pollution compared to nonattainment counties.

Co-authors : Andrew Schreiber and Wonjun Chang

Practical information