We address the issue of optimal investment in “preventative capital” to mitigate episodic, mobile-source air pollution events. We calibrate Berry et al.'s (2015) endogenous-risk model using a unique dataset related to "red air day" episodes occurring in Northern Utah over the past decade. Our analysis demonstrates that, under a wide range of circumstances, the optimal steady-state level of preventative capital stock – raised through the issuance of a municipal “clean air bond” that funds more aggressive mitigation efforts – can meet the standard for PM2.5 concentrations with positive social net benefits. We estimate benefit-cost ratios ranging between 0.9:1 and 2.2:1, depending upon trip-count elasticity with respect to preventative capital stock. These ratios are lower than the range estimated for the 1990 Clean Air Act Amendments in general.
.csv, .txt, .pdf
Utah Agricultural Experiment Station
Utah State University
Utah Agricultural Experiment Station 1334
Data is secondary, compiled in Microsoft Excel Worksheet format. The data sources are the US Environmental Protection Agency, the Utah Division of Air Quality, the Utah Department of Transportation, and the Weather Underground.
Definition of acronyms, codes, and abbreviations: Variable abbreviations are as indicated in the working paper, which is available for download.
This work is licensed under a Creative Commons Attribution 4.0 License.
Caplan, A. J., & Acharya, R. (2018). Preventative Capital Study (Cache County). Utah State University. https://doi.org/10.15142/T3J06K
Additional FilesREADME.txt (2 kB)
CachePreventativeCapitalPaper_v12.pdf (1358 kB)
Preventative_Capital_Study_CacheCounty.csv (283 kB)
Probit_Model_CacheCounty.csv (278 kB)