The Economics of Environmental Justice, with Samuel Stolper and Catherine Hausman

Notable Quotes

• Limited choices available to low-income families: “So, low-income families obviously face really binding budget constraints. They need to make difficult choices about where to spend their money, and that can mean choosing a cheaper house in a neighborhood that has more pollution if it means more money is left over to spend on utilities and food and transportation, and other really necessary, important things.” (6:27)
• Growing body of knowledge on air pollution: “If you look at the toxic release inventory in the United States, which has expanded over time, the implication is that we learn that there are more pollutants that are harmful, and that maybe some of those pollutants are more harmful than we previously thought.” (10:05)
• Consequences of “information failures”: “The Environmental Protection Agency has an ambient lead standard on the books, and it has for a lot of years. It has changed precisely once over the last 20 years, and that was in 2008, and the standard was tightened. It dropped from 1.5 micrograms per cubic meter to 0.15 micrograms per cubic meter … Who is bearing the burden of that misinformation? What are the consequences of us having been wrong?” (10:36)
• Vulnerable communities disproportionately impacted by pollution: “We see, and we tend to see, that the poor and people of color have a disproportionate exposure to that pollution. Whether that’s because of sorting on income; … or discrimination; or even just firms trying to minimize their costs and so seeking cheap land or labor, causing polluting firms to co-locate with people with less resources—any of those causes may produce disproportionate exposure. Information, or misinformation in this case, interacts with all of them, and in our examples and in our models, actually exacerbates that disproportionate exposure.” (19:32)

Top of the Stack

• "Inequality, Information Failures, and Air Pollution" by Catherine Hausman and Samuel Stolper
• Hop on Pop by Dr. Seuss
• The Dispossessed by Ursula K. Le Guin

The Full Transcript

Daniel Raimi: Hello and welcome to Resources Radio, a weekly podcast from Resources for the Future. I'm your host, Daniel Raimi. This week, we talk with Professor Catie Hausman and Professor Sam Stolper of the University of Michigan about a new working paper they've coauthored called “Inequality, Information Failures, and Air Pollution.” Catie and Sam take an economics lens to the problem of environmental justice and identify a new and important channel through which these problems could arise, the role of information. I'm biased because Catie and Sam are friends of mine, but I think this work is fascinating so I hope you'll stay with us.

Okay. Catie Hausman and Sam Stolper, my friends here in Ann Arbor, Michigan. We are sitting in my living room on a Thursday afternoon having a cocktail and recording our podcast. So I'm really excited to be here with you and thank you both for joining us on Resources Radio.

Catherine Hausman: Thanks for having us.

Samuel Stolper: Yeah, thanks.

Daniel Raimi: So, Sam and Catie, we're going to talk about a recent paper that you've coauthored on environmental justice and economics, but before we get into the substance, we always like to ask our guests how they got interested in the world of environmental policy. So how'd you guys get into this?

Catherine Hausman: So, I grew up in Northern Minnesota, and outdoor education was a really big part of my upbringing. My parents and my teachers emphasized a real respect for the natural environment, for the Great Lakes, for the woods of Northern Minnesota, and our duty to protect the natural environment.

Samuel Stolper: For me, it was really my first job in economics as a research assistant for economists who were studying environmental policy. I, up to that point, had enjoyed hiking and planet earth and stuff like that, but I didn't consider environment my calling exactly. But I did statistical analysis to help evaluate environmental policy, and I felt it was empowering to be able to use math and statistics to say something constructive or critical about stuff that I think that people care about. And so, I went into a PhD in public policy thinking maybe I'll keep studying environmental policy, and that's what I did.

Daniel Raimi: Great. And Catie, I don't think you mentioned that the place where you grew up is a really beautiful place, Duluth, Minnesota. It's right on the lake. Tell us a little about it.

Catherine Hausman: Yeah, it is amazing. I used to spend afternoons after school walking down to sit on the shores of Lake Superior in January when nobody else was there, and so it was just me and the lake. And I moved away and told everybody how beautiful the Midwest was, and then found out that they had a different vision of the Midwest than I had.

Daniel Raimi: Yes, the Midwest has many splendors and some of them are more splendorous than others, I suppose.

Okay. So let's talk about this recent paper that you've coauthored, which we'll have a link to on the show page. You start off the paper by giving us a brief introduction to the idea of environmental justice and the notion that polluting sites are disproportionately located in low-income communities and/or communities of color. So to get us started, can you just give us a few examples of how that dynamic plays out in the real world?

Samuel Stolper: The one that comes immediately to mind is the siting of a landfill in Warren County, North Carolina. You know, that's, in many people's eyes, the incident that ignited, I think, the environmental justice movement nationally. Some 30,000 pounds of polychlorinated biphenyls, PCBs, which I think are a known toxic to humans, dumped along the side of the road all across in a number of counties in North Carolina.

The government knows it needs to dispose of that, you know, pick up that waste and hold it somewhere. It's going to be in a landfill, and the two final locations that the government of North Carolina considers are an existing publicly owned landfill in Chatham County, North Carolina, and a recently foreclosed privately owned piece of land in Warren County, and the socioeconomics and the demographics of those two places, those two counties are very different. Also, the water table is apparently very shallow in Warren County. Warren County, a lot more poverty and a lot more people of color, and no mayor and no city council at the time.

And so, despite possibly being a much less suitable place, Warren County, that's where the landfill goes, and there's lots of protests and marches that gain national attention followed by lawsuits. That's the example that pops into my head first.

Daniel Raimi: Yeah. And Sam, just briefly, roughly when was that decision being made? I can't remember off the top of my head.

Samuel Stolper: Late ’70s.

Daniel Raimi: Okay, great.

Samuel Stolper: Yeah. But you know, we wouldn't be studying this if this wasn't still a problem. And I live in Detroit, and for 30 years until last April, there was an incinerator operating very near to the geographic center of Detroit. And you know, we need to dispose of trash somehow, but an incinerator in the heart of the city raised my eyebrows when I moved there. It operates in the heart of Detroit, which is more than 80 percent black. The suburbs are the locus of a lot of white flight, and most of the trash in recent years that got burned in Detroit was from the suburbs. It was closed suddenly, to many people’s great joy, last April though.

Daniel Raimi: Interesting. So one theory for the environmental justice concerns that people sometimes point out and you do discuss in your paper is the idea that sometimes people come to the nuisance. So the idea that there is, you know, a polluting site and that people end up actually moving towards that polluting site for a variety of reasons. Can you talk about that theory and how it could explain some of these sort of dynamics that you're describing?

Catherine Hausman: Sure. So let's set aside racial and ethnic disparities for a minute, we can come back to those, and focus on the low-income aspect. So low-income families obviously face really binding budget constraints. They need to make difficult choices about where to spend their money, and that can mean choosing a cheaper house in a neighborhood that has more pollution if it means more money is left over to spend on utilities and food and transportation, and other really necessary, important things. So some analysts, especially in the economics literature, have emphasized that environmental justices speak to and are related to broader economic injustices, and they've wanted to emphasize policy solutions that focus on income redistribution rather than focusing on the environmental outcomes themselves.

Daniel Raimi: Great. That makes a lot of sense. And so that's one possible explanation for the types of injustices that we might see in the real world, but there are plenty of others that you discuss in the paper. Maybe I shouldn't say plenty, but there are at least several others that you discuss in the paper. So can you tell us more about those other possible explanations?

Samuel Stolper: I'd like to name first discrimination, for example, decisions that influence siting decisions that are motivated directly by racism or by an implicit acceptance of others' racism. Widespread racism in the housing market for decades that we've known about can affect the exposure of different people to pollution.

Catherine Hausman: Yeah, I'd second that. Related concerns that have been raised in the literature, you know, when new facilities are getting sited, maybe they choose where to go based on where they think people have the least political power, the least ability to put up a fight if a new neighborhood is coming in. So that again is related to racism and discrimination and broader patterns of injustice in the US.

Daniel Raimi: Yeah, that makes sense. So with that background in place, let's now get into kind of the substance of your paper and some of the approaches that you take, which I really enjoyed and thought was really exciting. One of the things that was new to me and I think is new in the literature, you can correct me if I'm wrong, but the idea that there's another channel through which environmental injustice can occur and that's through the role of information, or the lack of information.

One way you demonstrate this is by documenting how we've learned over time that certain air pollutants are actually much more harmful than we previously had thought. So how does that fact that we've learned about dangers from certain air pollutants—that we've learned more about them, we've learned that they are riskier than we previously thought—how do you use that to sort of illustrate this story of environmental justice?

Samuel Stolper: Yeah, sure. Great question. So we make decisions about where to live and anything else that affects our exposure to environmental quality or pollution based on the information we have at the time. And to the extent that that's incomplete or wrong, then we may come to regret those decisions, or we may have made different decisions had we had that information, had different information originally. And when you just look at the march of science, of scientific progress, or if you look at the toxic release inventory in the United States, which has expanded over time, the implication is that we learn that there are more pollutants that are harmful, and that maybe some of those pollutants are more harmful than we previously thought.

One of the examples that we describe and investigate in the paper is the case of ambient lead pollution in air in the United States. So the Environmental Protection Agency has an ambient lead standard on the books and it has for a lot of years. It's changed precisely once over the last 20 years, and that was in, I think 2008, and the standard was tightened. It dropped from 1.5 micrograms per cubic meter to .15 micrograms per cubic meter. So that's a—

Daniel Raimi: That's a big change.

Samuel Stolper: Yeah, a whole order of magnitude of difference. A big change, a big drop. And the EPA came out and said, you know, this decision is motivated by scientific progress, by new understanding, new evidence from scientific research that says lead is worse than we thought it was.

So one natural question to ask in light of that change is, well, who is bearing the burden of that misinformation? What are the consequences of us having been wrong? And the way we do that in the paper, one way to do that is to investigate the distribution of lead in air pollution across the country at the time of that, right before that change happened. So people had already chosen places to live, and the people who were presumably living closer to areas with high lead concentrations, those are the ones that seem to lose the most out of this new realization that lead is a lot worse than we thought.

So who are those folks? Well, they tend to be poor and they tend to be less likely to be white.

Catherine Hausman: Yeah. So that scientific march of progress comes out in a couple of different ways. One is that we learn about new biological pathways that we didn't know about. So we're learning more and more about cognitive impacts of particulate matter for instance, or we learn about cardiovascular impacts in addition to respiratory impacts.

Another mechanism through which it can come out is that we tend to find out that facilities were polluting more than we thought rather than less. I mean, lots of times we had it right and we knew how much a facility was polluting, but when we get it wrong, we tend to find out after the fact that there was a leak that we didn't know about, and so the facility either unintentionally or intentionally was releasing more than the public knew about. And then again, who's living next to that facility? It tends to be low-income communities and communities of color.

Daniel Raimi: And so this sort of tells us that even if the entire world has essentially the same amount of information, or at least the people potentially living closer to these places, if everyone has the same information, there's still a disproportionate impact that is being borne by lower income or people of color. Do we have any sense of why that would be?

Catherine Hausman: So that's really important, that part that everybody has the same wrong information and the same wrong processing of the information that is available. We're not saying that people in these communities know less. If anything, they may know more because they're engaging in grassroots efforts to figure out what's going on in industrial facilities nearby. So it's because of the way pollution dissipates, right?

So if we find out that a facility is releasing more than we thought, or that the health damages from that are bigger than we thought, who's impacted? The people that are living right next door. As you get farther out and you get into neighborhoods that have higher incomes and have been able to buy property farther away, it just doesn't matter as much anymore because the pollution has dissipated, it's settled out.

Samuel Stolper: Yeah, I think Catie said it really well. I mean, in the lead example, we have these standards that we set for lead or for, you know, any pollutant, and part of the reason we set these standards is because we think there are these non-linearities. So below a certain threshold, you know, for lead, we actually think no amount of lead is safe, but for some pollutants, below a certain level is maybe okay and above a certain level is less okay. So even if everybody has the same information or lack thereof, it's only some subset of the population that is exposed to above that threshold that might be negatively affected.

Daniel Raimi: Right. And so I think a related point that you relay in the paper is the idea that sometimes when people live in lower-income communities, those lower-income communities might have what are sometimes referred to as nuisance elements, or I forget the exact term, but, you know, essentially nuisances in the community, such as maybe an ugly factory or a smelly something or other that's going on as a result of some industrial process. Those are often found in lower-income communities as we've discussed. And as you're sort of implying with some of your comments, some of these smells or sights might actually be much more than just nuisances, they could actually be driving substantial pollution that might be unknown to the people living in the community. So could you just talk a little bit more about how that dynamic can drive environmental injustice and how you kind of explore it in your paper?

Catherine Hausman: Yeah. So suppose that we thought that nobody knew anything about pollution, that's clearly not right, but as sort of one bounding example, you're still going to get low-income folks living next to these nuisances because they're willing to accept the noise or the ugly view in exchange for having more money left over for the other things that they really need in their lives.

So it makes sense that, you know, I might be willing to live next to the highway even though it's loud and not as pretty as the Lake Superior that I grew up on, but what matters is that that highway is also a source of cars and trucks that are putting out particulate matter and things that transform into ozone and other things that are bad for my health, and maybe I didn't have enough information to really incorporate that into my decision. And it's not because I'm dumb or uninformed, it's that we're all getting it wrong. So I'd challenge your listeners to think about whether they're up to date on all the epidemiology and whether they're fully informed. I'd guess that most of us are not. Well, maybe your listeners are, but-

Daniel Raimi: Our listeners are fully informed about everything.

Catherine Hausman: Your listeners are fully informed, but—

Daniel Raimi: Unlike their host.

Catherine Hausman: —Much of the public is not.

Daniel Raimi: Yeah. Actually, our discussions about particulate matter, you know, both with other colleagues as well as with you, is one of the reasons we actually have a particulate matter monitor here at my house where we're sitting right now. We actually can detect in real time the air quality that's around here. And that's one of the examples of someone who has the means, being able to inform, you know, myself and my family about things that we might be concerned about.

Catherine Hausman: Can I see your monitor when we're done?

Daniel Raimi: It's actually right there. We have an indoor one that's over there on the counter, and we have an outdoor one that I'll show you later.

Catherine Hausman: Cool.

Daniel Raimi: Yeah, we're decked out with PM2.5 monitors here.

Samuel Stolper: What about the other pollutants?

Daniel Raimi: Yeah, those are more expensive.

Catherine Hausman: Touche, Sam.

Daniel Raimi: Yeah. So there are lots and lots of really interesting implications that come out of this paper, and I just kind of want to open it up for you to summarize what you think some of the key lessons are, either for policymakers or for, you know, just citizens. Catie, you're sort of encouraging us to be more aware of what the research is telling us, but what are some of the other key takeaways that you hope people will come away with from this analysis?

Samuel Stolper: Well, one is that we think that information is not just kind of a channel through which environmental inequity or injustice may emerge, but it also kind of interacts with all the other channels, kind of overlaying on top of them. And when I teach about environmental justice in my courses, I like order and I like to kind of have a mutually exclusive list of like causes of environmental injustice, but then at the end, I have to acknowledge that actually none of these are mutually exclusive and they all interact with each other.

And in the case of information, it's become clear as we have tried to slot information into the literature and these various causes, that one way to view it is as being overlaid on top of the existing causes of disproportionate exposure. That is to say, whatever the initial cause of the distribution of pollution exposure, we see and we tend to see, that the poor and people of color have a disproportionate exposure to that pollution. Whether that's because of sorting on income, the coming to the nuisance, moving to the nuisance, or because of the so-called path to least resistance, or discrimination, or even just firms trying to minimize their costs and so seeking cheap land or labor, and that causing polluting firms to co-locate with people with less resources—any of those causes may produce disproportionate exposure. Information, or misinformation in this case, interacts with all of them, and in our examples and in our models, actually exacerbate that disproportionate exposure.

Catherine Hausman: I'd add two things. One is, you know, information is a public good, and so, basic theory says it's going to be under provided, and it's really important that government agencies invest in getting information and releasing information. There's some cause for optimism that, you know, monitoring technologies are getting cheaper and easier to deploy, the monitor that you talked about for your house, bucket brigades and other community-based monitoring initiatives. There's some cause for optimism and, you know, the march of scientific progress, both from the government and at grassroots and individual levels means we know more and more and we can do a better job of incorporating environmental damages into our everyday decisionmaking.

So I think that's a cause for optimism, but it's also worth pointing out, we haven't said it yet in our conversation, a very obvious point, which is that, you know, when low-income households are hit by pollution damages, obviously they're the ones least able to adapt to those and deal with the health costs of them. And we didn't say that, but I think it's worth noting, and we incorporate that into our framework in the paper because that's a really important point.

Daniel Raimi: Yeah, absolutely.

Samuel Stolper: I'll just say one more thing, which is basically to affirm what you said earlier, Daniel. That's why I didn't lead with this after you asked this question because you already said it, but I'll just affirm that we think one of the most important points in this paper is the fact that the misinformation can be uniform, right? I think I've read in numerous places and heard the argument numerous times, not just when it comes to environment, but when it comes to justice considerations and access for any number of goods, that differences in how informed people are across type, perhaps levels of wealth or education, or the differences in the cost of obtaining information across types, across people, could generate these inequities.

But what emerges from our modeling and thought exercise is that that doesn't need to be the case. And we don't need to assume that some people have more information than others, when that may not even be accurate or fair, that we can all have the same amount of information and that can nonetheless lead to inequity.

Daniel Raimi: Yeah, it's super interesting. And I remember when I was talking to you, Catie, in particular, as you and Sam were sort of dreaming up this project and starting to work on it, but Sam, you know, I wonder if either of you have any thoughts, and maybe you've already spoken to it Sam, but I remember you were sort of interested in particularly communicating some of these messages to economists in particular. Are there any sort of particular lessons that you think economists should really pay attention to, maybe more so than like the general public? And if you don't want to answer that question, that's fine too.

Catherine Hausman: No, I'm happy to answer it, it's just such a big one.

Daniel Raimi: Yeah.

Catherine Hausman: That's a good big meaty question. Our econ models are super useful for stripping down extraneous things and highlighting what mechanisms really matter in policymaking and in the decisions that people make in their everyday lives. Sometimes that means we strip away too much complexity and we get rid of what really matters. And I think historically we've done too much stripping away of important things about information and political power, and it's time to bring some of that back into our basic modeling.

Samuel Stolper: Yeah, I think I totally agree. And it seems to me that citing information and how we model it, and how we might over assume the level of informedness in our modeling exercises and our interpretation of results is accurate, and also a relatively more benign thing to say to economists as something to consider, that maybe we should incorporate imperfect information more ubiquitously or to a greater degree in thinking about willingness to pay for environmental quality and the decisions we make about where to live and work.

You know, the less, not less benign, but a less safe thing to suggest is that we need to take seriously justice considerations. Recently, it feels like there's a lot more study of what people would call environmental justice in economics, and by economists. And I think for a while, you know, I've only been in this field for 10, 12 years, so I'm relatively new, but it seems like there's a trend towards studying more distributional considerations and distributional impacts. And I just hope that that continues because I think that's one of the reasons that communities of non-economists don't necessarily see eye to eye or trust communities of economists.

Daniel Raimi: Yeah, I think that's a really nice note to end on before we go to our final segment. I don't know if that's a provocative statement to some economists. It certainly doesn't seem very provocative to me. It seems pretty reasonable, but yeah, I'm really happy we're ending on that note. And in case you heard any slapping noises in the recording, Sam was gesticulating a little bit and hitting his knees. So no one was smacking Sam as he was giving his answer to this question.

Samuel Stolper: I apologize to the audience.

Daniel Raimi: He's perfectly safe. So let's go on now and I'd like to ask both of you the same question that we ask all of our guests, which is, what's on the top of your literal or metaphorical reading stack? So something that you've been reading or watching or listening to or consuming through any media of your choice that you would recommend to our audience.

Samuel Stolper: So I know this is a question you ask of your readers from previous podcasts, I'm nonetheless not prepared to answer traditionally with a single book or a piece of media. I think I do a fair amount of media consumption including reading. It's generally not focused, at least my leisure reading, is not really focused on environment, environmental considerations, but there are exceptions, but I think they would be out of date, those recommendations that I would give.

Daniel Raimi: Okay, okay.

Samuel Stolper: But a topic that I am thinking a lot about and trying to read a lot about is water affordability in our cities, in this country, in the world. It's recently come to my attention that this is an increasing problem. Because of trends in income levels and income distribution, and because of aging infrastructure, et cetera, for certain populations, it's becoming really difficult to afford water. And I just think that ability to pay cannot possibly be a limiting factor for water access in the city I live in, in this country, in this world. And so, I am hoping to be studying that and helping to change the story, and I would encourage other people to think about water affordability too.

Daniel Raimi: Yeah. And I mean, this has been a really big issue in Detroit for the last several years. Is that how it sort of came to your attention or—

Samuel Stolper: Yeah, it is. I'm trying to understand and talking to people who've been living in Detroit a lot longer than me and working on issues related to the environment in Detroit, finding out from them that water affordability is at the top of that list. It's a compelling and terrible problem. So yeah, that's how it came to me.

Catherine Hausman: I'm prepared to give a more traditional answer in the sense that I am always prepared to talk about what novels I'm reading.

Daniel Raimi: Yes, I can vouch for that.

Catherine Hausman: Which you can, yes. So I guess the two things I've enjoyed that I've read recently, one, Hop on Pop. Can't go wrong with Hop on Pop.

Daniel Raimi: [Laughter] Catie and I both have small children.

Catherine Hausman: But you asked about things related to the environment, so I guess I need a second answer. I'm going to go with The Dispossessed by Ursula Le Guin. Not narrowly environment, but science, government, capitalism, freedom, anarchy, community, family. It's got it all.

Samuel Stolper: The small stuff.

Daniel Raimi: Yeah. That's great.

Daniel Raimi: So when you're relaxing you're getting heavy.

Catherine Hausman: Yeah.

Samuel Stolper: Is that nonfiction or fiction?

Catherine Hausman: Fiction.

Samuel Stolper: Okay.

Catherine Hausman: Yeah, you should read it. It's great.

Daniel Raimi: Great. Okay, so we have all sorts of recommendations for today. We have entire fields to study from Sam, we have children's books from Catie, and we have a heavy sci-fi from Catie as well. Or maybe I shouldn't say it's heavy, I'm not sure.

Catherine Hausman: Yeah, but in a fun way.

Daniel Raimi: Okay, great. So thank you again, Catie and Sam, my friends, for coming over to the house today, talking to us about your work on environmental justice. We really appreciate this work and we really appreciate you coming on Resources Radio and telling us about it.

Samuel Stolper: Thank you so much.

Catherine Hausman: Thank you, Daniel.

Daniel Raimi: You've been listening to Resources Radio. If you have a minute, we'd really appreciate you leaving us a rating or a comment on your podcast platform of choice. Also, feel free to send us your suggestions for future episodes.

Resources Radio is a podcast from Resources for the Future. RFF is an independent, nonprofit research institution in Washington DC. Our mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. Learn more about us at rff.org.

The views expressed on this podcast are solely those of the participants. They do not necessarily represent the views of Resources For the Future, which does not take institutional positions on public policies. Resources Radio is produced by Elizabeth Wason, with music by me, Daniel Raimi. Join us next week for another episode.