Benefits and Costs of Electricity in Pre-Clean Air Act United States

Karen Clay, Carnegie Mellon University
Joshua Lewis, Université de Montréal
Edson Severnini, Carnegie Mellon University

Electrification has been shown to have positive effects on a variety of outcomes. The benefits of electricity may be offset by the costs of pollution such as infant mortality, when the energy mix depends primarily on fossil fuels. We study these issues in pre-Clean Air Act United States, when strict air pollution regulations were not in place. To address the benefits and costs of electricity, we combine newly digitized extremely detailed data on electricity generation with data on mortality and land values at the county level. We find that controlling for baseline pollution, getting 10 miles closer to a power plants with 30MW+ of capacity increase housing prices by 3.2 percent. Controlling for the percentage of households with lighting (proxy for electricity as a consumption amenity), getting 10 miles closer to a power plants with 30MW+ of capacity decrease housing prices by 1.3 percent.