Paper Number: 2013-04
Document Date: 08/2013
Author(s): Glenn Sheriff and Kelly Maguire
Subject Area(s): Indoor Air Quality; Benefit-Cost Analysis; Distributional Effects
JEL Classification: Welfare Economics: Allocative Efficiency; Cost–Benefit Analysis; Equity; Justice; Inequality; and Other Normative Criteria and Measurement; Environmental Economics: Pollution Control Adoption and Costs; Distributional Effects; Employment Effects; Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
Keywords: environmental justice; distributional analysis; inequality indexes; lorenz curves; benefit-cost analysis
Abstract: This paper develops methods for evaluating distributional impacts of alternative environmental policies across demographic groups. The income inequality literature provides a natural methodological toolbox for comparing distributions of environmental outcomes. We show that the most commonly used inequality indexes, such as the Atkinson index, have theoretical properties that make them inappropriate for analyzing bads, like pollution, as opposed to goods, like income. We develop a transformation of the Atkinson index suitable for analyzing bad outcomes. We also show how the rarely used Kolm-Pollak index is particularly convenient for ranking distributions of both good and bad health and environmental outcomes. We demonstrate these methods in the context of emissions standards affecting indoor air quality.
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- Ranking Distributions of Environmental Outcomes Across Populations Groups (PDF)(49 pp, 1 MB, 08/2013)