Conference Agenda

Petroleum product price controls are often justified as a means to curb inflation and/or help the poor cope with the adverse effects of higher oil prices. Notwithstanding, a price ceiling for petroleum products may lead to negative health externalities. In this study, we examine the impacts of gasoline price stabilization policies on vehicle fuel demand, air pollution, and infant health across municipalities in Brazil over the period 2005-2016. To estimate the causal effects of interest, we leverage comprehensive data and an instrumental variables approach based on refinery oil prices and sugarcane quality. We have three main findings. First, gasoline consumption has become more responsive to prices over time, likely due to the diffusion of flexible-fuel vehicles. Second, gasoline consumption generates sizable negative externalities in terms of both higher local air pollution and higher pediatric hospitalization for respiratory conditions. Third, back-of-the-envelope calculations indicate that such externalities reinforce the public sector deficit generated by gasoline price stabilization policies. On the one hand, direct price control at the federally-owned oil company reduces federal corporate revenue, and fuel tax reduction lowers federal tax revenue. On the other hand, the additional pollution-driven hospitalizations are mostly paid for by the federal government through the publicly-funded universal health care system. Thus, not only federal revenue decreases, but also federal spending increases.

Noncognitive skills are important predictors for life outcomes like education, health and earnings. This paper provides causal evidence on the effect of in-utero exposure to air pollution on noncognitive ability in childhood. I use the meteorological phenomenon of thermal inversions to address the endogeneity in exposure to particulate matter and data from a representative household survey in Germany to measure noncognitive abilities. I find that an increase in particulate matter concentration by 1 unit during the prenatal period raises neuroticism at age 5-10 by 7% of a standard deviation. This implies that affected children are less emotionally stable, more fearful and less self-confident. Back of the envelope computations indicate that a one standard deviation increase in particulate matter reduces adult earnings by 0.24%-0.29% just through its impact on neuroticism.

We study the impacts of high temperatures on milder mental health outcomes using

clinical administrative data from a National Health Service of England programme treating anxiety and depression. Leveraging monthly variation in temperatures at the English Clinical Commissioning Group level, we find robust evidence indicating that extremely hot temperatures, i.e. above 34℃, lead to an increase in the demand for mental health support, assessments, and treatments by approximately 10, 15 and 12 per cent, respectively. We also show that when temperature shocks are long-lasting and result in heat waves longer than ten days, the effects are particularly pronounced. These results are not affected by individuals’ adaptive response to similar heat stress experienced in the previous month or year. Our back-of-the-envelope calculation indicates that the monetary health costs associated with heat stress are substantial.