Sunday, November 6, 2011

Clearing the Air? The Effects of Gasoline Content Regulation on Air Quality 
Abstract: This paper examines whether US gasoline content regulations, which impose substantial costs on consumers, have successfully reduced ozone pollution. We take advantage of spatial and temporal variation in the regulations' implementation to show that federal gasoline standards, which allow refiners flexibility in choosing a compliance mechanism, did not improve air quality. This outcome occurred because minimizing the cost of compliance does not reduce emissions of those compounds most prone to forming ozone. In California, however, we find that precisely targeted, inflexible regulations requiring the removal of particularly harmful compounds significantly improved air quality.

by Maximilian Auffhammer and Ryan Kellogg
American Economic Review via American Economic Association
Volume 101, Number 6; October, 2011 DOI:10.1257/aer.101.6.2687

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