Traffic Congestion and Infant Health: Evidence from E-ZPass*

This paper provides evidence of the significant negative health externalities of traffic congestion. We exploit the introduction of electronic toll collection, or E-ZPass, which greatly reduced traffic congestion and emissions from motor vehicles in the vicinity of highway toll plazas. Specifically, we compare infants born to mothers living near toll plazas to infants born to mothers living near busy roadways but away from toll plazas with the idea that mothers living away from toll plazas did not experience significant reductions in local traffic congestion. We also examine differences in the health of infants born to the same mother, but who differ in terms of whether or not they were “exposed” to E-ZPass. We find that reductions in traffic congestion generated by E-ZPass reduced the incidence of prematurity and low birth weight among mothers within 2km of a toll plaza by 6.7-9.1% and 8.5-11.3% respectively, with larger effects for African-Americans, smokers, and those very close to toll plazas. There were no immediate changes in the characteristics of mothers or in housing prices in the vicinity of toll plazas that could explain these changes, and the results are robust to many changes in specification. The results suggest that traffic congestion is a significant contributor to poor health in affected infants. Estimates of the costs of traffic congestion should account for these important health externalities. * We are grateful to the MacArthur foundation for financial support. We thank Katherine Hempstead and Matthew Weinberg of the New Jersey Department of Health, and Craig Edelman of the Pennsylvania Department of Health for facilitating our access to the data. We are grateful to James MacKinnon and seminar participants at Harvard University, the University of Maryland, Queens University, Princeton University, the NBER Summer Institute, the SOLE/EALE 2010 meetings, Tulane University, and Uppsala University for helpful comments. All opinions and any errors are our own. Motor vehicles are a major source of air pollution. Nationally they are responsible for over 50% of carbon monoxide (CO), 34 percent of nitrogen oxide (NO2) and over 29 percent of hydrocarbon emissions in addition to as much as 10 percent of fine particulate matter emissions (Ernst et al., 2003). In urban areas, vehicles are the dominant source of these emissions. Furthermore, between 1980 and 2003 total vehicle miles traveled (VMT) in urban areas in the United States increased by 111% against an increase in urban lane-miles of only 51% (Bureau of Transportation Statistics, 2004). As a result, traffic congestion has steadily increased across the United States, causing 3.7 billion hours of delay by 2003 and wasting 2.3 billion gallons of motor fuel (Schrank and Lomax, 2005). Traditional estimates of the cost of congestion typically include delay costs (Vickrey, 1969), but they rarely address other congestion externalities such as the health effects of congestion. This paper seeks to provide estimates of the health effects of traffic congestion by examining the effect of a policy change that caused a sharp drop in congestion (and therefore in the level of local motor vehicle emissions) within a relatively short time frame at different sites across the northeastern United States. Engineering studies suggest that the introduction of electronic toll collection (ETC) technology, called E-ZPass in the Northeast, sharply reduced delays at toll plazas and pollution caused by idling, decelerating, and accelerating. We study the effect of E-ZPass, and thus the sharp reductions in local traffic congestion, on the health of infants born to mothers living near toll plazas. This question is of interest for three reasons. First, there is increasing evidence of the long-term effects of poor health at birth on future outcomes. For example, low birth weight has been linked to future health problems and lower educational attainment (see Currie (2009) for a summary of this research). The debate over the costs and benefits of emission controls and traffic congestion policies could be significantly impacted by evidence that traffic congestion has a deleterious effect on fetal health. Second, the study of newborns overcomes several difficulties in making the connection between pollution and health because, unlike adult diseases that may reflect pollution exposure that occurred many years ago, the link between cause and effect is immediate. Third, E-ZPass is an interesting policy experiment because, while pollution control was an important consideration for policy makers, the main motive for consumers to sign up for E-ZPass is to reduce travel time. Hence, E-ZPass offers an example of achieving reductions in pollution by bundling emissions reductions with something consumers perhaps value more highly such as reduced travel time. Our analysis improves upon much of the previous research linking air pollution to fetal health as well as on the somewhat smaller literature focusing specifically on the relationship between residential proximity to busy roadways and poor pregnancy outcomes. Since air pollution is not randomly assigned, studies that attempt to compare health outcomes for populations exposed to differing pollution levels may not be adequately controlling for confounding determinants of health. Since air quality is capitalized into housing prices (see Chay and Greenstone, 2003) families with higher incomes or preferences for cleaner air are likely to sort into locations with better air quality, and failure to account for this sorting will lead to overestimates of the effects of pollution. Alternatively, pollution levels are higher in urban areas where there are often more educated individuals with better access to health care, which can cause underestimates of the true effects of pollution on health. In the absence of a randomized trial, we exploit a policy change that created large local and persistent reductions in traffic congestion and traffic related air emissions for certain segments along a highway. We compare the infant health outcomes of those living near an electronic toll plaza before and after implementation of E-ZPass to those living near a major highway but further away from a toll plaza. Specifically, we compare mothers within 2 kilometers of a toll plaza to mothers who are between 2 and 10 km from a toll plaza but still within 3 kilometers of a major highway before and after the adoption of E-ZPass in New Jersey and Pennsylvania. New Jersey and Pennsylvania provide a compelling setting for our particular research design. First, both New Jersey and Pennsylvania are heavily populated, with New Jersey being the most densely populated state in the United States and Pennsylvania being the sixth most populous state in the country. As a result, these two states have some of the busiest interstate systems in the country, systems that also happen to be densely surrounded by residential housing. Furthermore, we know the exact addresses of mothers, in contrast to many observational studies which approximate the individual’s location as the centroid of a geographic area or by computing average pollution levels within the geographic area. This information enables us to improve on the assignment of pollution exposure. Lastly, E-ZPass adoption and take up was extremely quick, and the reductions in congestion spillover to all automobiles, not just those registered with E-ZPass (New Jersey Transit Authority, 2001). Our difference-in-differences research design relies on the assumption that the characteristics of mothers near a toll plaza change over time in a way that is comparable to those of other mothers who live further away from a plaza but still close to a major highway. We test this assumption by examining the way that observable characteristics of the two groups of mothers and housing prices change before and after E-ZPass adoption. We also estimate a range of alternative specifications in an effort to control for unobserved characteristics of mothers and neighborhoods that could confound our estimates. We find significant effects on infant health. The difference-in-difference models suggest that prematurity fell by 6.7-9.16% among mothers within 2km of a toll plaza, while the incidence of low birth weight fell by 8.5-11.3%. We argue that these are large but not implausible effects given previous studies. In contrast, we find that there are no significant effects of E-ZPass adoption on the demographic characteristics of mothers in the vicinity of a toll plaza. We also find no immediate effect on housing prices, suggesting that the composition of women giving birth near toll plazas shows little change in the immediate aftermath of E-ZPass adoption (though of course it might change more over time). The rest of the paper is laid out as follows: Section I provides necessary background. Section II describes our methods, while data are described in Section III. Section IV presents our results. Section VI discusses the magnitude of the effects we find, and Section V details our conclusions. I. Background Many studies suggest an association between air pollution and fetal health. Mattison et al. (2003) and Glinianaia et al. (2004) summarize much of the literature. For more recent papers see for example Currie et al. (2009); Dugandzic et al. (2006); Huynh et al. (2006); Karr et al. (2009); Lee et al. (2008); Leem et al. (2006); Liu et al. (2007); Parker et al. (2005); Salam et al. (2005); Ritz et al. (2006); Wilhelm and Ritz (2005); Woodruff et al. (2008). Since traffic is a major contributor to air pollution, several studies have focused specifically on the effects of exposure to motor vehicle exhaust (see Wilhelm and Ritz (2003); Ponce et al. (2005); Brauer et 1 There is also a large literature linking air pollution and child health, some of it focusing on the effects of traffic on child health. See Schwartz (2004) and Glinianaia et al. (2004b) for reviews. al. (2008); Slama et al. (2007); Beatty and Shimshack (2009); Knittel, Miller, and Sanders (2009)). At the same time, researchers have documented many differences between people who are exposed to high volumes of traffic and others (Gunier et al, 2003). A correlational study cannot demonstrate that the effect of pollution is causal. Women living close to busy roadways are more likely to have other characteristics that are linked to poor pregnancy outcomes such as lower income, education, and probabilities of being married, and a higher probability of being a teen mother. This is partly because wealthier people are more likely to move away from pollution. Depro and Timmins (2008) show that gains in wealth from appreciating housing values during the 1990s allowed households in San Francisco to move to cleaner areas. Banzhaf and Walsh (2008) show that neighborhoods experiencing improvements in environmental quality tend to gain population while the converse is also true. Most previous studies include a minimal set of controls for potential confounders. Families with higher incomes or greater preferences for cleaner air may be more likely to sort into neighborhoods with better air quality. These families are also likely to provide other investments in their children, so that fetuses exposed to lower levels of pollution also receive more family inputs, such as better quality prenatal care or less maternal stress. If these factors are unaccounted for, then the estimated effects of pollution may be biased upwards. Alternatively, emission sources tend to be located in urban areas, and individuals in urban areas may be more educated and have better access to health care, factors that may improve health. Omitting these factors would lead to a downward bias in the estimated effects of pollution, suggesting that the overall direction of bias from confounding is unclear. Several previous studies are especially relevant to our work because they address the problem of omitted confounders by focusing on “natural experiments.” Chay and Greenstone [2003a,b] examine the implementation of the Clean Air Act of 1970 and the recession of the early 1980s. Both events induced sharper reductions in particulates in some counties than in others, and they use this exogenous variation in pollution at the county-year level to identify its effects. They estimate that a one unit decline in particulates caused by the implementation of the Clean Air Act (or by recession) led to between five and eight (four and seven) fewer infant deaths per 100,000 live births. They also find some evidence that declines in Total Suspended Particles (TSPs) led to reductions in the incidence of low birth weight. However, the levels of particulates studied by Chay and Greenstone are much higher than those prevalent today; for example, PM10 levels have fallen by nearly 50 percent from 1980 to 2000. Furthermore, only TSPs were measured during the time period they examine, which precludes the examination of other pollutants that are found in motor vehicle exhaust. Other studies that are similar in spirit include a sequence of papers by Pope and his collaborators, who investigated the health effects of the temporary closing of a Utah steel mill (Pope, 1989; Ransom and Pope, 1992; Pope, Schwartz, and Ransom, 1992) and Friedman et al. (2001) who examine the effect of changes in traffic patterns in Atlanta due to the 1996 Olympic games. However, these studies did not look at fetal health. Parker et al. (2008) examine the effect of the Utah steel mill closure on preterm births and find that exposure to pollution from the mill increased the probability of preterm birth. This study however does not speak to the issue of effects of traffic congestion on infant health. Currie, Neidell, and Schmeider (2008) examine the effects of several pollutants on fetal health in New Jersey using models that include maternal fixed effects to control for potential confounders. They find that CO is particularly implicated in negative birth outcomes. In pregnant women, exposure to CO reduces the availability of oxygen to be transported to the fetus. Carbon monoxide readily crosses the placenta and binds to fetal haemoglobin more readily than to maternal haemoglobin. It is cleared from fetal blood more slowly than from maternal blood, leading to concentrations that may be 10 to 15 percent higher in the fetus’s blood than in the mother’s. Indeed, much of the negative effect of smoking on infant health is believed to be due to the CO contained in cigarette smoke (World Health Organization, 2000). Hence, a significant effect of E-ZPass on CO alone would be expected to have a significant positive effect