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Exploring the Intersection of Economics, the Environment, and Human Behavior

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By Beth Saulnier

The effects of lead exposure on children’s physical and intellectual wellbeing isn’t an easy topic to study. For one thing, the most common ways kids are exposed—through old water pipes or flaking paint—are far more prevalent in socioeconomically disadvantaged households and in communities of color with aging infrastructure, making it hard to tease out lead’s effects amid myriad other factors. And, obviously, a conventional experiment would be unthinkable: researchers can’t knowingly expose certain children to lead and then compare them to a control group.

But for economist Nicholas Sanders and his research partners, a regulatory change—in, of all places, the world of NASCAR racing—offered an unexpected window into the topic. As they describe in a working paper circulated by the National Bureau of Economic Research in December 2020, NASCAR set the stage for a natural experiment when it banned leaded gasoline (previously allowed under an exemption to the Clean Air Act) in 2007.

Prof. Nicholas Sanders standing in front of trees and a brick building — Economics professor Nicholas Sanders on campus. (Photo by Ryan Young / Cornell University)

So Sanders and his colleagues studied the reading and math scores of children who attended elementary schools located near several NASCAR racetracks in Florida between 2003 and 2014, a span that overlapped the ban.

“Here we had a situation where the amount of lead to which these children were exposed changed, with theoretically nothing else about their schools changing; the districts didn’t get more or less funding because of NASCAR stopping its lead usage,” says Sanders, an assistant professor of economics in Cornell’s newly established Brooks School of Public Policy. “So it provided a unique opportunity.”

The study was one of many that Sanders has worked on during a research career that falls at the intriguing intersection of economics, the environment, and human behavior. In addition to his foray into auto racing, Sanders’s investigations have ranged across such varied topics as how Daylight Saving Time affects crime rates, the relationship between the Super Bowl and influenza, and whether extreme heat spurs violent behavior.

His current work is focused on quantifying an economic and societal impact of global warming: how the U.S. housing market responds to increases in the likelihood of flooding and the costs of flood insurance. “Economists don’t spend all their time worrying about things like the stock market; they think a lot about decision-making,” Sanders observes. “And I’m fascinated with how people make choices.”

Economists don’t spend all their time worrying about things like the stock market; they think a lot about decision-making. And I’m fascinated with how people make choices.

In 2015, Sanders made headlines with his work on Daylight Saving Time, conducted with a colleague then at the University of Virginia. Published in the Review of Economics and Statistics, it found that setting clocks ahead an hour each spring correlates to drops in violent crime. Why? As the theory goes, the fact that it’s suddenly light out during the evening discourages crimes like muggings and assaults. (But the extra hour of darkness early in the day doesn’t make mornings more dangerous—possibly because muggers tend to sleep in.)

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In a 2016 paper titled “Success Is Something to Sneeze At: Influenza Mortality in Cities that Participate in the Super Bowl,” published in the American Journal of Health Economics, Sanders and colleagues at Tulane teased out an unexpected health cost of the annual football championship: increased flu transmission. It’s not due to crowds at the game itself, which is generally held outdoors in a warm city—it’s that hometown fans gather to celebrate in the midst of the winter flu season.

“If your local team makes it to the Super Bowl, there's a very good chance you’re going to participate in a Super Bowl party, which will involve lots of people jammed into a tiny space—sharing common foods, touching the same drinks, slapping hands, and yelling,” he says. “And there are also bars full of people doing exactly that.”

Sanders’s overarching aim as an academic, though, is far broader than any single study: ultimately, he wants to help policymakers and others understand the economic benefits of regulations that protect the environment and public health. In short: he wants to quantify the good things that such rules enable, rather than those they prevent.

“Oftentimes, people focus on the costs of environmental regulations, because they're visible; you can see the wage growth forgone, the jobs lost, or the housing developments that can't happen,” he explains. “But it’s really hard to see the financial and social value—so the majority of my research is trying to find ways to quantify that.”

Oftentimes, people focus on the costs of environmental regulations, because they're visible; you can see the wage growth forgone, the jobs lost, or the housing developments that can't happen.

The work spurred by the NASCAR rule change is a prime example. In that study, the researchers found that exposure to ambient lead did, indeed, negatively impact academic performance, with the effects worse the closer the schools were to the racetracks. And since lower test scores can translate to a lifetime of curtailed income potential, protecting kids from lead carries tangible benefits in the form of higher wages and future economic growth.

“Right now, a big part of the Biden Administration’s infrastructure package is removing lead pipes,” Sanders points out. “And we can talk about the massive cost to dig up the ground, take the old pipes out, put new ones in, and repave the roads. This paper was a way to get a metric that says, ‘This is the benefit of removing lead from the system.’”

Similarly, Sanders and a colleague from the Wisconsin School of Business explored the connection between extreme heat and rates of violence. Studying records of behavioral infractions by inmates in Mississippi prisons that lacked air conditioning—where the heat index could top a brutal 120 degrees in summer—they found that rising temperatures did indeed lead to more violent and aggressive behavior, even among those serving time for nonviolent crimes.

While state governments often cite financial constraints for refusing to retrofit aging prisons with cooling systems, the work showed that—in addition to the obvious human suffering—there are bottom-line costs to the stifling temperatures in the form of staff time, medical bills, and longer sentences.

And, Sanders notes, in the era of global warming, the work has broader, even worldwide implications. “There are a lot of developing countries that don’t have air conditioning, and places in the U.S. with high-density populations that aren’t mobile because of income restrictions, and that don’t have the infrastructure to deal with rising temperatures,” he says. “Our goal was to say, ‘Here’s a picture of what can happen in these conditions.’”

Top image: Illustration by Cornell University

Published October 15, 2021

Comments

Tom Clark
26 Oct, 2021

Very informative and thought provoking. I think these empirical studies are very important to legislators as well as regulators when it comes to making good laws and regulations.

Reply
- Joe Magid, Class of 1979
  26 Oct, 2021
  
  Only if they are interested in data and facts when drafting legislation…
  
  Reply

Exploring the Intersection of Economics, the Environment, and Human Behavior

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