Government Spending and Air Pollution in the US

Transcription

1 Government Spending and Air Pollution in the US ONLINE APPENDIX Asif M. Islam* University of Maryland 2106 Symons Hall College Park, MD (651) Ramón E. López University of Maryland 3125 Symons Hall College Park, MD (301) JEL Classification: H50, H40, O13, O44, Q53 Keywords: air pollution, government spending, public goods, market imperfections *Corresponding author, Fax: (301)

2 TABLE B1: LOG DIFFERENCE OF SO2 AND FISCAL SPENDING VARIABLE STATE - FIXED SITE EFFECTS TVS-FSE SO2 PM 2.5 Ozone Share of PME over Total Spending State and Local Governments Share of PME over Total Spending Federal Grants, Expenditure, Loans and Insurance Total State and Local Government Spending over GDP ** ** *** ** *** *** [0.240] [0.254] [0.104] [0.108] [0.049] [0.051] ** 0.238** ** [0.144] [0.160] [0.093] [0.128] [0.039] [0.044] [0.478] [0.511] [0.263] [0.304] [0.114] [0.130] Total Federal Government Spending over GDP *** 0.284** 0.142*** [0.285] [0.297] [0.138] [0.143] [0.052] [0.053] Personal Income per Capita by County log difference (in thousands) whole county in the previous year (SO2 NAAQs) of the county in the previous year (SO2 NAAQs) *** *** 0.311** 0.300** [0.156] [0.159] [0.158] [0.149] [0.072] [0.073] * 0.018** [0.042] [0.042] [0.007] [0.008] * 0.019** 0.021** 0.006* [0.014] [0.014] [0.010] [0.010] [0.003] [0.003] whole county in the previous year (PM 2.5 NAAQs) of the county in the previous year (PM 2.5 NAAQs) *** *** [0.017] [0.017] [0.007] [0.007] [0.003] [0.003] ** * [0.033] [0.033] [0.012] [0.012] [0.007] [0.007] whole county in the Previous Year (PM10 NAAQs) year (PM10 NAAQs) [0.028] [0.028] [0.015] [0.017] [0.005] [0.005] 0.027* * ** [0.015] [0.016] [0.012] [0.012] [0.005] [0.005] * *** 0.027*** 0.005**

3 Year (O3 NAAQs) year (O3 NAAQs) [0.009] [0.010] [0.006] [0.006] [0.002] [0.002] [0.030] [0.030] [0.012] [0.013] [0.004] [0.004] Year (NO NAAQs) year (NO NAAQs) *** *** [0.039] [0.038] [0.008] [0.008] *** *** [0.080] [0.079] [0.006] [0.006] Year (CO NAAQs) year (CO NAAQs) ** ** [0.016] [0.016] [0.021] [0.022] [0.006] [0.006] *** *** [0.012] [0.012] [0.019] [0.019] [0.003] [0.003] year (lead NAAQs) * * 0.040* [0.041] [0.041] [0.023] [0.026] [0.006] [0.006] State Dummy x (Time Trend) Yes Yes Yes Yes Yes Yes 2 State Dummy x (Time Trend) Yes Yes Yes Yes Yes Yes 3 State Dummy x (Time Trend) Yes Yes Yes Yes Yes Yes 4 State Dummy x (Time Trend) Yes Yes Yes Yes Yes Yes 5 State Dummy x (Time Trend) No Yes No Yes No Yes Site characteristics and land use Yes Yes Yes Yes Yes Yes dummies Year Effects Yes Yes Yes Yes Yes Yes 2 Adjusted R Number of Observations Number of sites Specification Tests Test for the time independence of the residuals: p-values Correlation coefficient between *** *** *** the residuals and time trend Test for fixed site effect model Ho: b1 i = b2i = b3i = 0, for all i 323*** 406*** 1174*** 1688*** 288*** 495*** Log Likelihood Ratio Test * significant at 10%; ** significant at 5%; *** significant at 1%, Robust standard errors used 2

4 TABLE B2: LOG DIFFERENCE OF AIR POLLUTANTS AND FISCAL SPENDING SYSTEM GMM GMMcollapsed SO2 PM 2.5 Ozone GMM- GMM- GMM- GMM- GMMuncollapsed collapsed uncollapsed collapsed uncollapsed Share of PME over Total Spending State and Local Governments Share of PME over Total Spending Federal Grants, Expenditure, Loans and Insurance Total State and Local Government Spending over GDP *** *** *** ** * ** [0.088] [0.091] [0.053] [0.052] [0.022] [0.019] *** [0.035] [0.043] [0.016] [0.027] [0.009] [0.008] * * [0.133] [0.172] [0.048] [0.056] [0.030] [0.027] Total Federal Government Spending over GDP ** * *** *** 0.012* 0.021*** [0.028] [0.033] [0.012] [0.012] [0.006] [0.005] Personal Income per Capita by County log difference (in thousands) whole county in the previous year (SO2 NAAQs) of the county in the previous year (SO2 NAAQs) ** * ** [0.156] [0.141] [0.091] [0.101] [0.058] [0.068] * ** 0.010*** [0.018] [0.022] [0.013] [0.020] [0.004] [0.003] *** *** 0.019*** 0.019*** * [0.010] [0.012] [0.007] [0.007] [0.003] [0.002] whole county in the previous year (PM 2.5 NAAQs) of the county in the previous year (PM 2.5 NAAQs) ** *** *** [0.017] [0.019] [0.006] [0.009] [0.005] [0.005] ** [0.029] [0.036] [0.012] [0.011] [0.009] [0.010] whole county in the Previous Year (PM10 NAAQs) year (PM10 NAAQs) [0.025] [0.023] [0.008] [0.011] [0.003] [0.003] 0.024** ** * 0.008*** [0.011] [0.016] [0.006] [0.008] [0.003] [0.003] 3

5 Year (O3 NAAQs) year (O3 NAAQs) *** 0.015*** * [0.005] [0.007] [0.004] [0.005] [0.002] [0.002] * [0.021] [0.027] [0.009] [0.009] [0.003] [0.003] Year (NO NAAQs) year (NO NAAQs) ** *** *** [0.037] [0.035] [0.013] [0.008] *** *** [0.041] [0.060] [0.007] [0.007] Year (CO NAAQs) year (CO NAAQs) *** [0.010] [0.012] [0.009] [0.014] [0.004] [0.004] *** *** [0.007] [0.009] [0.010] [0.012] [0.002] [0.002] year (lead NAAQs) * ** * [0.041] [0.042] [0.016] [0.025] [0.007] [0.006] Log difference of SO2 (lagged) *** [0.170] [0.246] Log difference of PM2.5 (lagged) *** [0.122] [0.236] Log difference of O3 (lagged) *** ** [0.058] [0.159] Site characteristics and land use Yes Yes Yes Yes Yes Yes dummies Year Effects Yes Yes Yes Yes Yes Yes Hansen Test (P- value) Arellano-Bond test for AR(1) Arellano-Bond test for AR(2) Number of Observations Number of sites * significant at 10%; ** significant at 5%; *** significant at 1%, Robust standard errors used 4

6 Dominance Test TABLE B3: ROBUSTNESS CHECK EXTREME OBSERVATION DOMINANCE SO2 Share of PME goods over Total Spending by State and Bottom 1% Dropped Top 1% Dropped Top 1% & Bottom 5% Dropped Random Site Effects (RSE) *** [0.100] ** [0.116] *** [0.078] ** [0.137] *** [0.146] ** [0.159] Fixed Site Effects (FSE) *** [0.126] * [0.158] * [0.124] *** [0.154] *** [0.205] *** [0.201] TVS-RSE (4 th polynomial) ** [0.209] * [0.219] * [0.187] ** [0.237] *** [0.395] *** [0.375] Significant at *10%; ** 5%; *** 1%, Robust standard errors used 5

7 Dominance Test TABLE B4: ROBUSTNESS CHECK EXTREME OBSERVATION DOMINANCE PM 2.5 Share of PME goods over Total Spending by State and Bottom 1% Dropped Top 1% Dropped Top 1% & Bottom 5% Dropped Random Site Effects (RSE) *** [0.043] *** [0.044] *** [0.036] *** [0.053] *** [0.053] *** [0.057] Fixed Site Effects (FSE) *** [0.070] *** [0.062] *** [0.058] *** [0.069] *** [0.083] *** [0.083] TVS-RSE (4 th polynomial) *** [0.084] *** [0.086] *** [0.077] *** [0.096] *** [0.111] *** [0.117] TVS-FSE (4 th polynomial) *** [0.094] *** [0.099] *** [0.091] *** [0.109] *** [0.118] *** [0.124] Significant at *10%; ** 5%; *** 1%, Robust standard errors used 6

8 Dominance Test TABLE B5: ROBUSTNESS CHECK EXTREME OBSERVATION DOMINANCE OZONE Share of PME goods over Total Spending by State and Bottom 1% Dropped Top 1% Dropped Top 1% & Bottom 5% Dropped Random Site Effects (RSE) *** [0.030] ** [0.027] *** [0.020] *** [0.030] * [0.032] ** [0.031] Fixed Site Effects (FSE) *** [0.031] *** [0.031] *** [0.026] *** [0.032] *** [0.039] *** [0.039] TVS-RSE (4 th polynomial) *** [0.044] *** [0.046] *** [0.041] *** [0.048] *** [0.062] *** [0.062] TVS-FSE (4 th polynomial) *** [0.042] *** [0.045] *** [0.040] *** [0.050] *** [0.065] *** [0.065] Significant at *10%; ** 5%; *** 1%, Robust standard errors used \ 7

9 TABLE B6: LOG DIFFERENCE OF AIR POLLUTANT AND FISCAL SPENDING (3 YEAR AVERAGE) SO2 PM 2.5 Ozone FE RE FE RE FE RE Share of PME over Total Spending State and Local Governments Share of PME over Total Spending Federal Grants, Expenditure, Loans and Insurance Total State and Local Government Spending over GDP ** *** *** *** *** *** [0.215] [0.131] [0.174] [0.075] [0.054] [0.032] *** [0.129] [0.066] [0.100] [0.028] [0.030] [0.014] ** [0.439] [0.280] [0.276] [0.105] [0.130] [0.056] Total Federal Government Spending over GDP *** *** *** *** ** [0.110] [0.058] [0.077] [0.021] [0.021] [0.009] Personal Income per Capita by County log difference (in thousands) whole county within the 3 year period (SO2 NAAQs) whole county within the 3 year period (SO2 NAAQs) * * 0.108* [0.178] [0.163] [0.079] [0.057] [0.076] [0.073] *** [0.024] [0.032] [0.030] [0.007] [0.005] ** 0.021** [0.017] [0.019] [0.010] [0.008] [0.005] [0.004] Year (PM 2.5 NAAQs) whole county within the 3 year period (PM 2.5NAAQs) ** *** [0.015] [0.014] [0.007] [0.004] [0.003] [0.002] ** ** [0.026] [0.022] [0.018] [0.010] [0.008] [0.006] Year (PM10 NAAQs) whole county within the 3 year period (PM10 NAAQs) [0.106] [0.065] [0.018] [0.011] [0.008] [0.005] 0.036* ** [0.020] [0.017] [0.017] [0.009] [0.004] [0.003] Year (O3 NAAQs) *** *** *** [0.011] [0.009] [0.007] [0.004] [0.002] [0.002] 8

10 whole county within the 3 year period (O3 NAAQs) * *** [0.038] [0.029] [0.011] [0.008] [0.005] [0.003] Year (NO NAAQs) whole county within the 3 year period (NO NAAQs) *** *** [0.087] [0.054] [0.011] [0.010] *** *** [0.064] [0.069] [0.009] [0.007] Year (CO NAAQs) whole county within the 3 year period (CO NAAQs) [0.018] [0.014] [0.010] [0.011] [0.008] [0.006] * 0.020* *** *** [0.013] [0.010] [0.015] [0.010] [0.003] [0.003] whole county within the 3 year period (lead NAAQs) * ** 0.058** 0.028* [0.034] [0.035] [0.026] [0.015] [0.008] [0.006] Site characteristics and land use Yes Yes Yes Yes Yes Yes dummies Year Effects Yes Yes Yes Yes Yes Yes 2 Adjusted R Number of Observations Number of sites * significant at 10%; ** significant at 5%; *** significant at 1%, Robust standard errors used 9

11 TABLE B7: ESTIMATES OF OUTPUT ELASTICITIES OF ENERGY IN THE LITERATURE Study Elasticity Country and years US Industrial Sector Output Elasticities Kamerschen and Porter (2004) Stresing et al (2008) Cebula and Herder (2010) Output Elasticity of Electricity for US Industries Output Elasticity of Energy for US Industries Output Elasticity of Electricity for US Industries : 0.01 to : (+/ ) : 0.199(+/- 0.06) : 1.57 Industrial Sector Output Elasticities of OECD Countries Including US Liu (2004) Adeyemi and Hunt (2007) GDP/Income elasticities for electricity in industrial sector in 23 OECD countries including US using GMM Income Elasticity for industrial sector and energy for 15 OECD countries including US : short run : long run : Olund (2010) 9 OECD countries including US : 0.80 All Sectors Output Elasticities (Whole US Economy) Khanna (2001) Kamercshen et al (2005) Kummel et al (2008) Fillipini and Hunt (2011) Output Elasticity of Energy for all of US Total Income elasticity of electricity for all of US Output Elasticity of Energy (Linex elasticities) for all of US Income Elasticity of whole economy with regards to energy in 29 OECD countries : 0.30 to : : 0.35 (+/- 0.11) :

12 TABLE B8: TEST FOR STRUCTURAL CHANGE ACROSS REGIONS Test for Share of PME at the State and Local Level* P-values FE RE Sulfur Dioxide West Midwest *Null hypothesis: regions have equal parameters for state share of PME and intercept TABLE B9: REGION CLASSIFICATION Midwest Northeast South West Iowa Wisconsin Alabama Alaska Illinois Connecticut Arkansas Arizona Indiana Massachusetts District of Columbia California Kansas Maine Delaware Colorado Michigan New Hampshire Florida Hawaii Minnesota New Jersey Georgia Idaho Missouri New York Kentucky Montana North Dakota Pennsylvania Louisiana New Mexico Nebraska Rhode Island Maryland Nevada Ohio Vermont Mississippi Oregon South Dakota North Carolina Utah Oklahoma Washington South Carolina Wyoming Tennessee Texas Virginia West Virginia 11

13 Figure 1 Figure 2 12

14 Figure 3 Figure 4 13

15 Figure 5 Figure 6 14

16 Sulfur Dioxide Figure 7A: Counties in SO2 sample Figure 7B: Spatial relations between counties in SO2 sample 15

17 Particulate Matter 2.5 Figure 8A: Counties in PM2.5 sample Figure 8B: Spatial relations between counties in PM2.5 sample 16

18 Ozone Figure 9A: Counties in Ozone sample Figure 9B: Spatial relations between counties in Ozone sample 17