An Analysis of Improvements in Urban Air Quality: Implications from the South

James C. Murdoch University of Texas at Dallas Morteza Rahmatian California State University, Fullerton Mark A. Thayer San Diego State University April 2005 Thus, the existing literature dealing specifically with the SCAB seems to suggest that ethnic minorities are subjected to higher exposure to both the criteria air pollutants and air toxics, even if one accounts for differences in income, education, land use, and other potential determinants of exposure. Presumably then, the benefits of improvements in air quality would fall disproportionately on such groups. Is this conjecture correct? The second question that we investigate is if there is still a property value premium associated with ambient air quality in the SCAB. Using the hedonic price method (Rosen, 1974; Freeman, 1979), we examine housing prices over the period 1980 – 2000 and test whether or not the effect of air pollution on house prices disappears as air pollution converges across space.2 A priori, as the air pollution converges spatially, one would expect any property value premiums due to air quality differences to dissipate in the same way that property values have been shown to “rebound” from smaller scale environmental clean-ups(see Kiel (1995); Kohlhase (1991); Dale, et al, 1999) .