Do natural resources shocks affect preferences for political ideology?

Mariella Gonzales

My article exploits exogenous price shocks in international commodity markets and a rich dataset on mining and electoral outcomes in Peru to assess how natural resources shocks affect preferences for anti-establishment parties. I show that mining reduces support for these type of parties. The effect is big and significant when a mine facility opens in the district for the first time. In contrast, mining production seems to have a small effect.

Measuring the Welfare Loss from Pollution Using Defensive Goods and a Sufficient Statistics Approach

“Harry” Haishi Li

We propose a new method to estimate the welfare implication of pollution. Using a sufficient statistics approach, we link the price and quantity of sales of the anti-pollution defensive goods to the marginal willingness to pay. Armed with this approach, we may estimate both the marginal and total welfare loss from pollution at any point of time and space and we do not require exogenous variation in the level of pollution to implement it. We thus believe the method will find useful application in environmental policy evaluation and design. We test the approach against data on each of the 70 representative Chinese cities. We find that over September 2016-March 2017, the aggregate welfare impact of pollution on the Chinese cities ranges from a loss of 7.86 billion RMB (1 USD ~ 6.7 RMB) and 1.4 percent of the city’s 2016 GDP to a gain of 0.1 billion RMB.