Dissertations

Wednesday, 8 February, 2023

Olexiy Kyrychenko: Essays on Environmental and Health Economics

Defense Committee:

Daniel Münich (CERGE-EI, Chair)

Sebastian Ottinger (CERGE-EI)

Paola Bertoli (University of Verona, VŠE)

Dissertation Committee:

Patrick Gaulé (University of Bristol, Chair)

Štěpán Jurajda (CERGE-EI, Local Chair)

Filer Randall (The City University of New York)

Michal Bauer (CERGE-EI)

Andreas Menzel (CERGE-EI)

Referees:

Eleonora Fichera (University of Bath)

Myra Mohnen (University of Ottawa)

Link for the online connection: https://call.lifesizecloud.com/16921183, passcode: 9496

Abstract:

In the first chapter, we examine the impact of temperature on manufacturing production in India and the underlying mechanisms. Using plant-level manufacturing data and satellite-based temperature estimates from 1998-2007, we find that the relationship between temperature and output exhibits an inverted U-shape, with especially large losses occurring at extreme cold and hot temperatures. Such nonlinearity provides valuable insight into the potential welfare consequences of climate change. Back-of-the-envelope calculations suggest that a 1°C shift in the annual distribution of daily temperature would lead to net losses in manufacturing output of 1.3% or USD 0.6 billion, equivalent to a 0.5% reduction in India’s GDP 2007 through the manufacturing sector alone. The estimated temperature-output relationship is driven by the joint effects of temperature on total factor productivity and capital. This finding has important implications for adaptation. The manufacturing sector can adapt to changing climate by reducing the sensitivity of labor productivity to temperature and by making investments in machinery. Labor-related adjustments can also contribute to adaptation by offsetting direct productivity losses or facilitating labor reallocation. Guided by these strategies, India’s manufacturing can achieve climate change policy goals without compromising its growth and development perspectives.

In the second chapter, I reexamine empirical evidence on the effectiveness of environmental regulations in India from a study by Greenstone and Hanna (GH, 2014). GH report that air pollution control policies in India were effective in improving air quality but had a modest and statistically insignificant effect on infant mortality. These somewhat counterintuitive findings are likely to stem from the limited availability of ground-based air pollution data used in GH and the absence of critical meteorological confounders. I leverage recent advances in satellite technology and GH’s methodology to test the sensitivity of their findings to revised air pollution outcomes, an extended number of observations, and meteorological controls. Despite striking differences between the two datasets, reexamination using satellite-based data broadly confirms the conclusions drawn from GH’s data. The effects of the policies are, however, substantially weaker. The study urges further research on the effectiveness of environmental regulations in developing countries and the use of satellite-based estimates in the examination of this important question.

In the third chapter, I estimate the impact of the sharp reduction in particulate air pollution driven by the Global Financial Crisis of 2008 on district-level infant mortality in India. Utilizing plausibly exogenous geographic variation in the crisis-induced changes in air quality and novel data from household surveys and satellite-based sources, I find that the infant mortality rate fell by 24% more in the most affected districts, implying 1338 fewer infant deaths than would have occurred in the absence of the crisis. Analysis of the mechanisms indicates that air pollution reductions affected infant mortality mainly through respiratory diseases and two biological mechanisms: in-utero and post-birth exposure. Heterogeneity analysis further emphasizes the role of parental education in alleviating the adverse consequences of infants’ exposure to air pollution and justifies the need for interventions targeting low-income households. Calculations suggest that the estimated decline in infant mortality translates into a three-year after crisis total of USD 312.5 million. The resulting health benefits could be used as a benchmark for assessing the effectiveness of the policies designed to improve air quality in India.

Full Text: "Essays on Environmental and Health Economics"