@techreport{KalkuhlAmbergBergmannetal.2022, type = {Working Paper}, author = {Kalkuhl, Matthias and Amberg, Maximilian and Bergmann, Tobias and Knopf, Brigitte and Edenhofer, Ottmar}, title = {Gaspreisdeckel, Mehrwertsteuersenkung, Energiepauschale}, publisher = {Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH}, address = {Berlin}, pages = {23}, year = {2022}, language = {de} } @article{GrunerFussKalkuhletal.2022, author = {Gruner, Friedemann and Fuß, Sabine and Kalkuhl, Matthias and Minx, Jan C. and Strefler, Jessica and Merfort, Anne}, title = {Wie CO2-Entnahmen helfen k{\"o}nnen, die Klimaziele zu erreichen}, series = {Klima und Recht}, volume = {1}, journal = {Klima und Recht}, number = {1}, publisher = {C.H. Beck}, address = {M{\"u}nchen}, issn = {2750-0551}, pages = {18 -- 21}, year = {2022}, language = {de} } @article{SedovaKalkuhlMendelsohn2020, author = {Sedova, Barbora and Kalkuhl, Matthias and Mendelsohn, Robert}, title = {Distributional impacts of weather and climate in rural India}, series = {Economics of disasters and climate change}, volume = {4}, journal = {Economics of disasters and climate change}, number = {1}, publisher = {Springer}, address = {Cham}, issn = {2511-1280}, doi = {10.1007/s41885-019-00051-1}, pages = {5 -- 44}, year = {2020}, abstract = {Climate-related costs and benefits may not be evenly distributed across the population. We study distributional implications of seasonal weather and climate on within-country inequality in rural India. Utilizing a first difference approach, we find that the poor are more sensitive to weather variations than the non-poor. The poor respond more strongly to (seasonal) temperature changes: negatively in the (warm) spring season, more positively in the (cold) rabi season. Less precipitation is harmful to the poor in the monsoon kharif season and beneficial in the winter and spring seasons. We show that adverse weather aggravates inequality by reducing consumption of the poor farming households. Future global warming predicted under RCP8.5 is likely to exacerbate these effects, reducing consumption of poor farming households by one third until the year 2100. We also find inequality in consumption across seasons with higher consumption during the harvest and lower consumption during the sowing seasons.}, language = {en} } @article{EdenhoferKalkuhlRoolfs2021, author = {Edenhofer, Ottmar and Kalkuhl, Matthias and Roolfs, Christina}, title = {Carbon pricing and revenue recycling}, series = {CESifo forum}, volume = {22}, journal = {CESifo forum}, number = {5}, publisher = {Ifo}, address = {Munich}, issn = {2190-717X}, pages = {10 -- 14}, year = {2021}, language = {en} } @techreport{KalkuhlFlachslandKnopfetal.2022, type = {Working Paper}, author = {Kalkuhl, Matthias and Flachsland, Christian and Knopf, Brigitte and Amberg, Maximilian and Bergmann, Tobias and Kellner, Maximilian and St{\"u}ber, Sophia and Haywood, Luke and Roolfs, Christina and Edenhofer, Ottmar}, title = {Effects of the energy price crisis on households in Germany}, publisher = {Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH}, address = {Berlin}, pages = {35}, year = {2022}, language = {en} } @article{BaldeniusBernsteinKalkuhletal.2021, author = {Baldenius, Till and Bernstein, Tobias and Kalkuhl, Matthias and von Kleist-Retzow, Maximilian and Koch, Nicolas}, title = {Ordnungsrecht oder Preisinstrumente?}, series = {Ifo-Schnelldienst}, volume = {74}, journal = {Ifo-Schnelldienst}, number = {6}, publisher = {Institut f{\"u}r Wirtschaftsforschung}, address = {M{\"u}nchen}, issn = {0018-974X}, pages = {6 -- 10}, year = {2021}, language = {de} } @article{EdenhoferKalkuhlRequateetal.2020, author = {Edenhofer, Ottmar and Kalkuhl, Matthias and Requate, Tilman and Steckel, Jan Christoph}, title = {How assets get stranded}, series = {Journal of environmental economics and management}, volume = {100}, journal = {Journal of environmental economics and management}, publisher = {Elsevier}, address = {Amsterdam}, issn = {0095-0696}, doi = {10.1016/j.jeem.2020.102300}, pages = {4}, year = {2020}, abstract = {Internalizing external costs of carbon is a fundamental goal of climate policy. Since the seminal work of Arthur Pigou in 1920, economic theory has analyzed the efficiency gains arising from various instruments that internalize externalities and lead to Pareto-improvements. It is widely recognized in environmental economics that a carbon price would effectively reflect the scarcity of the atmospheric disposal space for carbon depending on the temperature target that is to be achieved. The question of how to organize the transition process, i.e. moving from inefficient to efficient allocations, and implementing the necessary policies, has gained increasing attention in recent years. Arguably, the transition process is tightly interwoven with political processes that include complex interactions between societal stakeholders, such as households and firms, on the one hand, and political decision makers, on the other. Accordingly, understanding political-economy aspects of the transition process, including distributional outcomes, is becoming increasingly relevant. While a growing literature discusses the distributional implications of climate policy on households, it is less well understood how asset owners might be affected by climate policy and how these potential impacts would interact with the transition process. This Special Section focuses on public policy challenges related to this transition problem, with special emphasis on asset owners. A core theme is the special role of stranded assets, i.e. a devaluation of capital stocks or financial assets either by introducing a stringent carbon price or by omitting a pre-announced policy of this kind.}, language = {en} } @article{KalkuhlWenz2020, author = {Kalkuhl, Matthias and Wenz, Leonie}, title = {The impact of climate conditions on economic production}, series = {Journal of Environmental Economics and Management}, volume = {103}, journal = {Journal of Environmental Economics and Management}, publisher = {Elsevier}, address = {San Diego}, issn = {0095-0696}, doi = {10.1016/j.jeem.2020.102360}, pages = {20}, year = {2020}, abstract = {We present a novel data set of subnational economic output, Gross Regional Product (GRP), for more than 1500 regions in 77 countries that allows us to empirically estimate historic climate impacts at different time scales. Employing annual panel models, long-difference regressions and cross-sectional regressions, we identify effects on productivity levels and productivity growth. We do not find evidence for permanent growth rate impacts but we find robust evidence that temperature affects productivity levels considerably. An increase in global mean surface temperature by about 3.5°C until the end of the century would reduce global output by 7-14\% in 2100, with even higher damages in tropical and poor regions. Updating the DICE damage function with our estimates suggests that the social cost of carbon from temperature-induced productivity losses is on the order of 73-142\$/tCO2 in 2020, rising to 92-181\$/tCO2 in 2030. These numbers exclude non-market damages and damages from extreme weather events or sea-level rise.}, language = {en} } @article{EdenhoferKalkuhlOckenfels2020, author = {Edenhofer, Ottmar and Kalkuhl, Matthias and Ockenfels, Axel}, title = {Das Klimaschutzprogramm der Bundesregierung}, series = {Perspektiven der Wirtschaftspolitik}, volume = {21}, journal = {Perspektiven der Wirtschaftspolitik}, number = {1}, publisher = {De Gruyter}, address = {Berlin}, issn = {1465-6493}, doi = {10.1515/pwp-2020-0001}, pages = {4 -- 18}, year = {2020}, abstract = {Das Klimaschutzgesetz hat einen Paradigmenwechsel eingeleitet: den Einstieg in eine CO2-Bepreisung als k{\"u}nftiges Leitinstrument der Klimapolitik. Auf den ersten Blick ist der CO2-Preis unter einer F{\"u}lle von F{\"o}rdermaßnahmen und ordnungsrechtlichen Regelungen versch{\"u}ttet, deren Wirksamkeit und Kosten h{\"o}chst unsicher sind. Der CO2-Preis ist aber so angelegt, dass er langfristig das dominante Instrument einer europ{\"a}isch harmonisierten Klimapolitik werden kann. Der angedeutete Paradigmenwechsel der deutschen Klimapolitik {\"o}ffnet damit die T{\"u}r, die europ{\"a}ische und internationale Kooperation zu st{\"a}rken. Dazu ist es aber notwendig, neben der europ{\"a}ischen auch die globale Klimapolitik neu auszurichten. Auch dort sollten sich die Verhandlungen statt auf nationale Mengenziele auf CO2-Preise konzentrieren. Die erforderliche Kooperation wird m{\"o}glich, wenn die Regierungen Transferzahlungen strategisch und reziprok nutzen. So k{\"o}nnte die Effektivit{\"a}t der Klimapolitik erh{\"o}ht werden und es ließen sich die entstehenden Verteilungskonflikte entsch{\"a}rfen.}, language = {de} } @article{SurethKalkuhlEdenhoferetal.2023, author = {Sureth, Michael and Kalkuhl, Matthias and Edenhofer, Ottmar and Rockstr{\"o}m, Johan}, title = {A welfare economic approach to planetary boundaries}, series = {Jahrb{\"u}cher f{\"u}r National{\"o}konomie und Statistik}, volume = {243}, journal = {Jahrb{\"u}cher f{\"u}r National{\"o}konomie und Statistik}, number = {5}, publisher = {De Gruyter Oldenbourg}, address = {Berlin}, issn = {0021-4027}, doi = {10.1515/jbnst-2022-0022}, pages = {477 -- 542}, year = {2023}, abstract = {The crises of both the climate and the biosphere are manifestations of the imbalance between human extractive, and polluting activities and the Earth's regenerative capacity. Planetary boundaries define limits for biophysical systems and processes that regulate the stability and life support capacity of the Earth system, and thereby also define a safe operating space for humanity on Earth. Budgets associated to planetary boundaries can be understood as global commons: common pool resources that can be utilized within finite limits. Despite the analytical interpretation of planetary boundaries as global commons, the planetary boundaries framework is missing a thorough integration into economic theory. We aim to bridge the gap between welfare economic theory and planetary boundaries as derived in the natural sciences by presenting a unified theory of cost-benefit and cost-effectiveness analysis. Our pragmatic approach aims to overcome shortcomings of the practical applications of CEA and CBA to environmental problems of a planetary scale. To do so, we develop a model framework and explore decision paradigms that give guidance to setting limits on human activities. This conceptual framework is then applied to planetary boundaries. We conclude by using the realized insights to derive a research agenda that builds on the understanding of planetary boundaries as global commons.}, language = {en} } @article{DiluisoWalkManychetal.2021, author = {Diluiso, Francesca and Walk, Paula and Manych, Niccolo and Cerutti, Nicola and Chipiga, Vladislav and Workman, Annabelle and Ayas, Ceren and Cui, Ryna Yiyun and Cui, Diyang and Song, Kaihui and Banisch, Lucy A. and Moretti, Nikolaj and Callaghan, Max W. and Clarke, Leon and Creutzig, Felix and Hilaire, Jerome and Jotzo, Frank and Kalkuhl, Matthias and Lamb, William F. and L{\"o}schel, Andreas and M{\"u}ller-Hansen, Finn and Nemet, Gregory F. and Oei, Pao-Yu and Sovacool, Benjamin K. and Steckel, Jan Christoph and Thomas, Sebastian and Wiseman, John and Minx, Jan C.}, title = {Coal transitions - part 1}, series = {Environmental research letters}, volume = {16}, journal = {Environmental research letters}, number = {11}, publisher = {Institute of Physics Publishing (IOP)}, address = {Bristol}, issn = {1748-9326}, doi = {10.1088/1748-9326/ac1b58}, pages = {40}, year = {2021}, abstract = {A rapid coal phase-out is needed to meet the goals of the Paris Agreement, but is hindered by serious challenges ranging from vested interests to the risks of social disruption. To understand how to organize a global coal phase-out, it is crucial to go beyond cost-effective climate mitigation scenarios and learn from the experience of previous coal transitions. Despite the relevance of the topic, evidence remains fragmented throughout different research fields, and not easily accessible. To address this gap, this paper provides a systematic map and comprehensive review of the literature on historical coal transitions. We use computer-assisted systematic mapping and review methods to chart and evaluate the available evidence on historical declines in coal production and consumption. We extracted a dataset of 278 case studies from 194 publications, covering coal transitions in 44 countries and ranging from the end of the 19th century until 2021. We find a relatively recent and rapidly expanding body of literature reflecting the growing importance of an early coal phase-out in scientific and political debates. Previous evidence has primarily focused on the United Kingdom, the United States, and Germany, while other countries that experienced large coal declines, like those in Eastern Europe, are strongly underrepresented. An increasing number of studies, mostly published in the last 5 years, has been focusing on China. Most of the countries successfully reducing coal dependency have undergone both demand-side and supply-side transitions. This supports the use of policy approaches targeting both demand and supply to achieve a complete coal phase-out. From a political economy perspective, our dataset highlights that most transitions are driven by rising production costs for coal, falling prices for alternative energies, or local environmental concerns, especially regarding air pollution. The main challenges for coal-dependent regions are structural change transformations, in particular for industry and labor. Rising unemployment is the most largely documented outcome in the sample. Policymakers at multiple levels are instrumental in facilitating coal transitions. They rely mainly on regulatory instruments to foster the transitions and compensation schemes or investment plans to deal with their transformative processes. Even though many models suggest that coal phase-outs are among the low-hanging fruits on the way to climate neutrality and meeting the international climate goals, our case studies analysis highlights the intricate political economy at work that needs to be addressed through well-designed and just policies.}, language = {en} } @article{KotzWenzStechemesseretal.2021, author = {Kotz, Maximilian and Wenz, Leonie and Stechemesser, Annika and Kalkuhl, Matthias and Levermann, Anders}, title = {Day-to-day temperature variability reduces economic growth}, series = {Nature climate change}, volume = {11}, journal = {Nature climate change}, number = {4}, publisher = {Nature Publishing Group}, address = {London}, issn = {1758-678X}, doi = {10.1038/s41558-020-00985-5}, pages = {319 -- 325}, year = {2021}, abstract = {Elevated annual average temperature has been found to impact macro-economic growth. However, various fundamental elements of the economy are affected by deviations of daily temperature from seasonal expectations which are not well reflected in annual averages. Here we show that increases in seasonally adjusted day-to-day temperature variability reduce macro-economic growth independent of and in addition to changes in annual average temperature. Combining observed day-to-day temperature variability with subnational economic data for 1,537 regions worldwide over 40 years in fixed-effects panel models, we find that an extra degree of variability results in a five percentage-point reduction in regional growth rates on average. The impact of day-to-day variability is modulated by seasonal temperature difference and income, resulting in highest vulnerability in low-latitude, low-income regions (12 percentage-point reduction). These findings illuminate a new, global-impact channel in the climate-economy relationship that demands a more comprehensive assessment in both climate and integrated assessment models.}, language = {en} } @article{EdenhoferFranksKalkuhl2021, author = {Edenhofer, Ottmar and Franks, Max and Kalkuhl, Matthias}, title = {Pigou in the 21st century}, series = {International tax and public finance}, volume = {28}, journal = {International tax and public finance}, number = {5}, publisher = {Springer}, address = {Dordrecht}, issn = {0927-5940}, doi = {10.1007/s10797-020-09653-y}, pages = {1090 -- 1121}, year = {2021}, abstract = {The year 2020 marks the centennial of the publication of Arthur Cecil Pigou's magnum opus The Economics of Welfare. Pigou's pricing principles have had an enduring influence on the academic debate, with a widespread consensus having emerged among economists that Pigouvian taxes or subsidies are theoretically desirable, but politically infeasible. In this article, we revisit Pigou's contribution and argue that this consensus is somewhat spurious, particularly in two ways: (1) Economists are too quick to ignore the theoretical problems and subtleties that Pigouvian pricing still faces; (2) The wholesale skepticism concerning the political viability of Pigouvian pricing is at odds with its recent practical achievements. These two points are made by, first, outlining the theoretical and political challenges that include uncertainty about the social cost of carbon, the unclear relationship between the cost-benefit and cost-effectiveness approaches, distributional concerns, fragmented ministerial responsibilities, an unstable tax base, commitment problems, lack of acceptance and trust between government and citizens as well as incomplete international cooperation. Secondly, we discuss the recent political success of Pigouvian pricing, as evidenced by the German government's 2019 climate policy reform and the EU's Green Deal. We conclude by presenting a research agenda for addressing the remaining barriers that need to be overcome to make Pigouvian pricing a common political practice.}, language = {en} } @article{DiluisoAnnicchiaricoKalkuhletal.2021, author = {Diluiso, Francesca and Annicchiarico, Barbara and Kalkuhl, Matthias and Minx, Jan Christoph}, title = {Climate actions and macro-financial stability}, series = {Journal of environmental economics and management}, volume = {110}, journal = {Journal of environmental economics and management}, publisher = {Elsevier}, address = {Amsterdam}, issn = {0095-0696}, doi = {10.1016/j.jeem.2021.102548}, pages = {22}, year = {2021}, abstract = {Limiting global warming to well below 2 degrees C may pose threats to macroeconomic and financial stability. In an estimated Euro Area New Keynesian model with financial frictions and climate policy, we study the possible perils of a low-carbon transition and evaluate the role of monetary policy and financial regulation. We show that, even for very ambitious climate targets, transition costs are moderate along a timely and gradual mitigation pathway. Inflation volatility strongly increases for disorderly climate policy, demanding a strong monetary response by central banks. In reaction to an adverse financial shock originating in the fossil sector, a green quantitative easing policy can provide an effective stimulus to the economy, but its stabilizing properties do not significantly differ from those of market neutral asset purchase programs. A financial regulation, encouraging the decarbonization of the banks' balance sheets via ad hoc capital requirements, can significantly reduce the severity of a financial crisis, but prolongs the recovery phase. Our results suggest that the involvement of central banks in climate actions must be carefully designed to be in compliance with their mandate and to avoid unintended trade-offs.}, language = {en} } @article{MontroneSteckelKalkuhl2022, author = {Montrone, Lorenzo and Steckel, Jan Christoph and Kalkuhl, Matthias}, title = {The type of power capacity matters for economic development}, series = {Resource and energy economics}, volume = {69}, journal = {Resource and energy economics}, publisher = {Elsevier}, address = {Amsterdam}, issn = {0928-7655}, doi = {10.1016/j.reseneeco.2022.101313}, pages = {17}, year = {2022}, abstract = {We examine the relationship between different types of power investments and regional economic dynamics. We construct a novel panel dataset combining data on regional GDP and power capacity additions for different technologies between 1960 and 2015, which covers 65\% of the global power capacity that has been installed in this period. We use an event study design to identify the effect of power capacity addition on GDP per capita, exploiting the fact that the exact amount of power capacity coming online each year is determined by random construction delays. We find evidence that GDP per capita increases by 0.2\% in the 6 years around the coming online of 100 MW coal-fired power capacity. We find similar effects for hydropower capacity, but not for any other type of power capacity. The positive effects are regionally bounded and stronger for projects on new sites (green-field). The magnitude of this effect might not be comparable to the total external costs of building new coal-fired power capacity, yet our results help to explain why policymakers favor coal investments for spurring regional growth.}, language = {en} } @article{HoffmannHoppeZiemann2021, author = {Hoffmann, Christin and Hoppe, Julia Amelie and Ziemann, Niklas}, title = {The hare and the hedgehog}, series = {PLoS one}, volume = {16}, journal = {PLoS one}, number = {8}, publisher = {PLoS}, address = {San Fransisco}, issn = {1932-6203}, doi = {10.1371/journal.pone.0256490}, pages = {15}, year = {2021}, abstract = {Against the background of the speed-accuracy trade-off, we explored whether the Pace of Life can be used to identify heterogeneity in the strategy to place more weight on either fast or accurate accomplishments. The Pace of Life approaches an individual's exposure to time and is an intensively studied concept in the evolutionary biology research. Albeit overall rarely, it is increasingly used to understand human behavior and may fulfill many criteria of a personal trait. In a controlled laboratory environment, we measured the participants' Pace of Life, as well as their performance on a real-effort task. In the real-effort task, the participants had to encode words, whereby each word encoded correctly was associated with a monetary reward. We found that individuals with a faster Pace of Life accomplished more tasks in total. At the same time, they were less accurate and made more mistakes (in absolute terms) than those with a slower Pace of Life. Thus, the Pace of Life seems to be useful to identify an individual's stance on the speed-accuracy continuum. In our specific task, placing more weight on speed instead of accuracy paid off: Individuals with a faster Pace of Life were ultimately more successful (with regard to their monetary revenue).}, language = {en} } @article{PlonerHessGrumetal.2020, author = {Ploner, Tina and Hess, Steffen and Grum, Marcus and Drewe-Boss, Philipp and Walker, Jochen}, title = {Using gradient boosting with stability selection on health insurance claims data to identify disease trajectories in chronic obstructive pulmonary disease}, series = {Statistical methods in medical research}, volume = {29}, journal = {Statistical methods in medical research}, number = {12}, publisher = {Sage Publ.}, address = {London [u.a.]}, issn = {0962-2802}, doi = {10.1177/0962280220938088}, pages = {3684 -- 3694}, year = {2020}, abstract = {Objective We propose a data-driven method to detect temporal patterns of disease progression in high-dimensional claims data based on gradient boosting with stability selection. Materials and methods We identified patients with chronic obstructive pulmonary disease in a German health insurance claims database with 6.5 million individuals and divided them into a group of patients with the highest disease severity and a group of control patients with lower severity. We then used gradient boosting with stability selection to determine variables correlating with a chronic obstructive pulmonary disease diagnosis of highest severity and subsequently model the temporal progression of the disease using the selected variables. Results We identified a network of 20 diagnoses (e.g. respiratory failure), medications (e.g. anticholinergic drugs) and procedures associated with a subsequent chronic obstructive pulmonary disease diagnosis of highest severity. Furthermore, the network successfully captured temporal patterns, such as disease progressions from lower to higher severity grades. Discussion The temporal trajectories identified by our data-driven approach are compatible with existing knowledge about chronic obstructive pulmonary disease showing that the method can reliably select relevant variables in a high-dimensional context. Conclusion We provide a generalizable approach for the automatic detection of disease trajectories in claims data. This could help to diagnose diseases early, identify unknown risk factors and optimize treatment plans.}, language = {en} } @article{BrueckKnauerSchwering2022, author = {Br{\"u}ck, Christian and Knauer, Thorsten and Schwering, Anja}, title = {Disclosure of value-based performance measures}, series = {Accounting and business research}, volume = {53}, journal = {Accounting and business research}, number = {6}, publisher = {Routledge, Taylor \& Francis Group}, address = {Abingdon}, issn = {0001-4788}, doi = {10.1080/00014788.2022.2062585}, pages = {671 -- 698}, year = {2022}, abstract = {We examine the determinants of the disclosure of value-based (VB) performance measures in Germany. We argue that firms are more likely to disclose VB performance measures when information asymmetry is greater, as greater information asymmetry means firms have a greater need to credibly signal a shareholder value orientation. Using a hand-collected dataset of German listed firms covering 1,528 firm-years from 2004 to 2011, we demonstrate that firms are more likely to disclose a VB performance measure if the free float is larger than the blocking minority and also, when firms are large, if they have high foreign sales to total sales ratios and are not cross-listed internationally. Our results indicate that German firms use VB performance measures to improve investor communication and to substantiate their shareholder value orientation. Our results should be interpreted against a background of increased shareholder value orientation and sophisticated cost accounting in German firms.}, language = {en} } @article{FranksKalkuhlLessmann2023, author = {Franks, Max and Kalkuhl, Matthias and Lessmann, Kai}, title = {Optimal pricing for carbon dioxide removal under inter-regional leakage}, series = {Journal of environmental economics and management}, volume = {117}, journal = {Journal of environmental economics and management}, publisher = {Elsevier}, address = {Amsterdam}, issn = {1096-0449}, doi = {10.1016/j.jeem.2022.102769}, year = {2023}, abstract = {Carbon dioxide removal (CDR) moves atmospheric carbon to geological or land-based sinks. In a first-best setting, the optimal use of CDR is achieved by a removal subsidy that equals the optimal carbon tax and marginal damages. We derive second-best policy rules for CDR subsidies and carbon taxes when no global carbon price exists but a national government implements a unilateral climate policy. We find that the optimal carbon tax differs from an optimal CDR subsidy because of carbon leakage and a balance of resource trade effect. First, the optimal removal subsidy tends to be larger than the carbon tax because of lower supply-side leakage on fossil resource markets. Second, net carbon exporters exacerbate this wedge to increase producer surplus of their carbon resource producers, implying even larger removal subsidies. Third, net carbon importers may set their removal subsidy even below their carbon tax when marginal environmental damages are small, to appropriate producer surplus from carbon exporters.}, language = {en} } @article{BorckSchrauth2020, author = {Borck, Rainald and Schrauth, Philipp}, title = {Population density and urban air quality}, series = {Regional science and urban economics}, volume = {86}, journal = {Regional science and urban economics}, publisher = {Elsevier}, address = {Amsterdam}, issn = {0166-0462}, doi = {10.1016/j.regsciurbeco.2020.103596}, pages = {24}, year = {2020}, abstract = {We use panel data from Germany to analyze the effect of population density on urban air pollution (nitrogen oxides, particulate matter, ozone, and an aggregate index for bad air quality [AQI]). To address unobserved heterogeneity and omitted variables, we present long difference/fixed effects estimates and instrumental variables estimates, using historical population and soil quality as instruments. Using our preferred estimates, we find that the concentration increases with density for NO2 with an elasticity of 0.25 and particulate matter with elasticity of 0.08. The O-3 concentration decreases with density with an elasticity of -0.14. The AQI increases with density, with an elasticity of 0.11-0.13. We also present a variety of robustness tests. Overall, the paper shows that higher population density worsens local air quality.}, language = {en} }