Gone with the Wind: The Aggregate Productivity Consequences of Crop Residue Burning in India | Anshuman Tiwari
Ashuman Tiwari is a PhD student in Environmental Economics at the Grantham Research Institute. He will be presenting his paper “Gone with the Wind: The Aggregate Productivity Consequences of Crop Residue Burning in India”.
Abstract
Developing countries face the burden of enabling economic growth while tackling environmental crises that are often a result of poverty itself. In this paper, I provide evidence that large-scale residue burning in North-Western India contributes up to 23% of annual particulate matter concentrations (pm2.5) over the rest of North India. While it is well known that air pollution has consequences for population health and mortality, worker productivity impacts of residue burning could lead to spatial misallocation of productive labour. I quantify the aggregate productivity impacts of this misallocation through a quantitative spatial equilibrium model that features endogenous air pollution generation with exogenous transport, and costly worker migration in response to productivity and utility shocks from air pollution. I estimate the pollution transport parameter and migration elasticity of air pollution using exogenous variation in daily wind patterns and fire counts as well as thermal inversions. Counterfactuals that reduce residue burning in North-Western India to levels in the rest of the country raise national GDP by 7.8%, orders of magnitude higher than the compensation necessary for farmers to stop burning.
Please email gri.events@lse.ac.uk to request the Zoom joining details for this workshop by 5pm on Tuesday, 12th October 2021.