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Volume 28 - Issue 5 - October 2023

Latest issue of Environment and Development Economics
Contents

Research Article

  • The effect of air pollution on China's internal migration

  • Wenbo Li
  • Published online by Cambridge University Press: 06 January 2023, pp. 409-428

  • Have people in China moved from more polluted cities to less polluted ones? We merge city-level air pollution data from 2003 to 2016 with migration data from a nationally representative sample. We estimate a linear model and a conditional logit model, and employ air pollution from distant sources carried by the wind as an instrument for local air pollution to address the potential concern that air pollution is endogenous to local economic activities. We make a distinction between out-migration that left some family members behind and whole-household out-migration, and discover that the former was more responsive to air pollution than the latter. The decline in net in-migration in response to an increase in air pollution was driven by both a decrease in gross in-migration and an increase in gross out-migration. We find suggestive evidence that out-migrants brought their children with them, but some aged parents were left behind.

  • A real-options analysis of climate change and international migration

  • Marius Braun
  • Published online by Cambridge University Press: 06 March 2023, pp. 429-448
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  • The potential impact of climate change on international migration patterns has recently received considerable attention, yet much of the empirical literature fails to find increases in international migration due to climate change. This paper attempts to resolve this “immobility paradox” by applying a real-options framework to the relationship between climate change and international migration. This framework suggests that individuals may postpone their migration response to climate change in the face of uncertainty and only migrate once impacts of climate change have exceeded certain thresholds. We test this prediction using semiparametric regression methods which allow us to empirically identify the threshold effects implied by the real-options framework. However, the findings are generally inconsistent with such threshold effects. Rather, the results suggest that in low-income countries, individuals’ migration response is hampered by the existence of liquidity constraints. These are likely to become more binding due to climate change-induced decreases in agricultural productivity.

  • Environmental management, environmental innovation, and productivity growth: a global firm-level investigation

  • Ruohan Wu
  • Published online by Cambridge University Press: 18 July 2023, pp. 449-468
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  • This paper empirically investigates the economic effects of environmental activities. To be specific, it investigates the interactive influence of firms' environmental management and environmental innovation on their productivity. We consider both internal and external environmental management practices of global firms observed from 41 countries between 2017 and 2019. We also consider both inputs and outputs of firms' innovation activities that aim to reduce environmental impacts. Multiple indices are constructed to comprehensively evaluate firms' environmental activities, and productivity is estimated with a semi-parametric method. We find that environmental management and environmental innovation are directly correlated to each other and both substantially promote productivity; however, they tend to substitute each other's positive effects on productivity. Other variables such as globalization, government, labor inputs, and informal competition strongly affect firm productivity too.

  • Environmental delegation versus sales delegation: a game-theoretic analysis

  • Domenico Buccella, Luciano Fanti, Luca Gori
  • Published online by Cambridge University Press: 20 March 2023, pp. 469-485
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  • Recently, in their 2019 paper, Poyago-Theotoky and Yong consider a managerial Cournot duopoly with pollution externalities and emission taxes and propose an explicit environmental incentive in a managerial compensation contract. The authors compare several exogenous equilibria emerging in the symmetric sub-games in which the owner offers either the environmental delegation contract or the standard sales delegation contract: abatement and social welfare (resp. emission taxes) under environmental delegation are higher (resp. lower) than under sales delegation. The present work extends their model using a game-theoretic approach to analyse the asymmetric sub-games, in which only one firm adopts the environmental contract, and adds the contract decision stage. Results show that the environmental contract never emerges as the unique sub-game perfect Nash equilibrium of this non-cooperative managerial decision game. Indeed, if the green R&D technology is efficient, the sales contract emerges as the unique Pareto-inefficient Nash equilibrium. Otherwise, if the green R&D technology is inefficient, multiple Nash equilibria in pure strategies exist (coordination game). Our findings offer direct policy implications.

  • Does extreme temperature exposure take a toll on mental health? Evidence from the China Health and Retirement Longitudinal Study

  • Yanran Chen, Ruochen Sun, Xi Chen, Xuezheng Qin
  • Published online by Cambridge University Press: 05 June 2023, pp. 486-510
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  • Long-term exposure to extreme temperatures could threaten individuals' mental health and psychological wellbeing. This study aims to investigate the long-term impact of cumulative exposure to extreme temperature. Differently from existing literature, we define extreme temperature exposure in relative terms based on local temperature patterns. Combining the China Health and Retirement Longitudinal Study and environmental data from the U.S. National Oceanic and Atmospheric Administration from 2011 to 2015, this study demonstrates that heat and cold exposure days in the past year significantly increase the measured depression level of adults over age 45 by 1.75 and 3.00 per cent, respectively, controlling for the city, year, and individual fixed effects. The effect is heterogeneous across three components of depression symptoms as well as age, gender, and areas of residency, and air conditioning and heating equipment are effective in alleviating the adverse impact of heat and cold exposure. The estimation is robust and consistent across a variety of temperature measurements and model modifications. Our findings provide evidence on the long-term and accumulative cost of extreme temperature to middle-aged and elderly human capital, contributing to the understanding of the social cost of climate change and the consequent health inequality.