Working Papers

Economic Impact of International Waste Flows

Abstract: I quantify the economic impact of international trade in waste. I build a structural gravity model in which waste is a byproduct of manufacturing and an input to recycling while waste flows are governed by both comparative advantage and the pollution haven effect. Although existing patterns of waste trade make countries of all income levels better off, low-value waste trade makes middle-income countries worse off. China’s 2018 ban on low-value waste imports made China and several lower-income countries better off. The economic loss in lower-income countries due to low-value waste trade is attributed to the pollution haven effect.

Presentations (§ scheduled): International Economic Association World Congress 2023, University at Albany - State University of New York 2022, Colorado University Environmental & Resource Economics Workshop 2022, Midwest International Trade Conference 2022, American Economic Association 2022 (Poster), Southern Economic Association 2021, Western Economic Association Annual 2021, Midwest Economic Association 2021, Western Economic Association International 2021, Heartland Environmental and Resource Economics Workshop at Illinois 2019, UIUC Graduate Seminars 

Trade Clubs and International Environmental Agreements: The Basel Convention (with George Deltas)  [Draft available upon request]

Abstract: The Basel Convention for trade in hazardous waste regulates waste trade between members and also imposes stringent restrictions on trade between members and non-members. We investigate the importance of these exclusionary trade restrictions in encouraging countries to join. We find that accession to the treaty indeed reduces waste trade between members and non-members, and provides incentives to join the Convention once membership becomes sufficiently high. Using both reduced form and model-based analysis, we show that this trade effect is quantitatively important in causing countries with a low intrinsic willingness to join to become members. Our findings have implications for the efficacy of trade clubs in counteracting free-rider effects in the formation of international environmental agreements. 

Presentations (§ scheduled, † by co-author): Midwest International Economics Group Spring Meeting 2024, Indian Statistical Institute Delhi 2024, Western Illinois University 2023, Heartland Workshop on Environmental and Resource Economics at Illinois 2023†, University of Vermont 2023†, The Political Economics of Environmental Sustainability Conference, Stanford University, 2023, Canadian Resource and Environmental Economics Association Annual Conference 2023, CRETE 2023†, Conference on Auctions, Competition, Regulation, and Public Policy, Lancaster University, 2023†,  AERE@SEA 2022†

Global Impact of a Unilateral Waste Trade Regulation                        

Conditionally Accepted, Journal of the Association of Environmental and Resource Economists

China banned imports of several waste categories beginning in 2017. Exploiting variation in the types of materials covered by the ban, I combine a difference-in-differences approach with the gravity model of trade to estimate its impact on global waste flows. My results show that the ban led to an overall decline in international waste flows, primarily through the reduction in imports by China. While some of the low-value waste materials like plastics were diverted to other lower-income countries, overall trade in high-value waste like metals declined. Back-of-the-envelope calculations suggest that low-income countries saved 1.3-3.8 billion USD in external costs by 2020, roughly 14-32% of the savings by China. My results indicate that a unilateral regulation can meaningfully lower environmental costs beyond the regulation-imposing country.

Work in Progress

Waste Trade and Firm Performance: Evidence from China (with Cihang Wang, Shihan Xie, and Victoria Wenxin Xie)

Presentations (§ scheduled, † by co-author): Southern Economic Association

Publications

Economic Integration and Diffusion of Regulatory Standards: Evidence from Trade Networks (with Sergio Rocha) [Online Appendix]                                     

Accepted, Canadian Journal of Economics                                        

Abstract:  We document network effects in the diffusion of regulatory standards through international trade. Using both an instrumental variables approach, based on the time-varying geographic component of trade, and a recentering approach, exploiting the timing of regulation adoption, we provide robust evidence that countries tend to domestically adopt the regulations of their key trade partners, especially when imposed by their export destinations. Leveraging the high dimensionality of our data, we show that the diffusion process is stronger for regulations and products with observable compliance. Our findings imply that economic integration can strengthen regulatory standards, aiding international policy coordination. 

Presentations († by co-author): Australasian Trade Workshop 2023†, Western Economic Association International 2023†, Midwest Economic Association 2021†, North American Regional Science Council 2020†, Mid-Continent Regional Science Association 2019, UIUC Graduate Seminars