The effect of air pollution on criminal activities: Evidence from the NOx Budget Trading Program

Abstract

This paper examines the impacts of air pollution on criminal activities by exploiting three dimensions of variations observed under a rich quasi-experiment: the NOx Budget Trading Program. This program has been well documented to decrease air pollution concentrations in participating states. Employing a triple-difference estimator, we find evidence showing that the program significantly reduced violent and property crimes in participating states by roughly 3.7% and 2.9%, respectively. Instrumental variable estimates suggest that lowering air pollution may play an important role in reducing criminal behaviors.