Real Estate & Planning Research Seminar by Dr Jasdeep Mandia from the Indian Institute of Management (IIM) Ahmedabad, India. Title "Pollution, Population, and Production: A Structural Analysis of Wildfire Smoke and Spatial Sorting"

Abstract:

Wildfires in the United States are becoming more frequent and severe, with California bearing the greatest burden. While prior research emphasizes direct damages and health effects, this study examines how wildfire incidents and their smoke influence household migration and firm performance. Exploiting temporal variation in wildfire and smoke exposure from 2011–2023, we combine household-level migration and demographic data with firm-level information on employment, revenue, and survival. Both hazards cause persistent population losses, with smoke having the larger effect: a one–standard-deviation increase in smoke exposure reduces household counts by 0.3–0.4% each year following exposure, whereas comparable wildfire exposure lowers them by about 0.2%. By contrast, smoke exposure has particularly strong effects on older households: those aged 50 and above experience declines exceeding 0.5% in several lags, while younger groups show small, short-run inflows, reflecting differences in preferences toward smoke exposure and likelihood of homeownership. These heterogeneous responses translate into meaningful shifts in neighbourhood composition, altering the spatial sorting of households across affected areas. Smoke exposure also leads to sizable and lasting contractions in business activity, reducing firm counts by about one percent per standard deviation, with smaller firms disproportionately affected. To capture the general equilibrium implications of these shifts, we estimate a residential sorting model in which local amenities are endogenously supplied by firms operating within neighbourhoods. We find that, on average, households are willing to pay 3.2% of property value to avoid such smoke exposure, rising to 4% among those aged 65 and above. The model highlights that older households are key drivers of local service demand—particularly in health and retail—while education services are least responsive to changes in the older population.

Bio:

Jasdeep Mandia is an environmental and urban economist currently working as an Assistant Professor at the Indian Institute of Management (IIM) Ahmedabad, India. Previously, he was a Postdoctoral Associate at the Center for Energy and Environmental Policy Research (CEEPR), MIT. He earned his Ph.D. in Economics from Arizona State University. His research delves into household amenity valuation, residential sorting, and environmental justice, focusing on noise pollution, wildfires, electricity, and water access.

Before his Ph.D., Jasdeep gained research experience in India, working with organizations such as J-PAL South Asia and UChicago EPIC. He also briefly worked with the World Bank. His educational background includes engineering and an MBA. Website