Authors' response to The Unjournal's evaluations of "The Environmental Effects of Economic Production: Evidence from Ecological Observations"

We thank the Unjournal team and the reviewers for the new experience. Our paper is currently under review, and the Unjournal inputs will certainly help the paper to be in a better shape when it eventually appears in a journal! We want to use the space here to add several comments of our own.

Really this paper has just one core message: econometric measurement of biodiversity can be done. This applies both to the metrics of biodiversity itself and to the impacts of various stressors thereon. First, real biodiversity measurements are at hand. For example, the one we use in this paper – the BioTIME data – is a publicly available dataset that consolidates hundreds of (longitudinal) ecological studies since 1960s. Other sources are emerging too. Second, quasi-experimental designs that were used to study conventional economic outcomes can be useful to identify biodiversity effects as well. Our paper presents three quasi-experiments: (1) the Nakamura and Steinsson (AER 2014) military buildup shift-share design to generate quasi-experimental state level spending; (2) wind directivity and pollution transport design a la Deryguina et al (AER 2019) and Barwick et al. (REStat, forthcoming) to get at the causal effect of air pollution; and (3) county-level environmental regulation variation resulting from Clean Air Act’s outdoor air quality standards. This has been widely used in the field of environmental economics to study productivity, environment, health, and amenity impacts of regulation (Chay and Greenstone JPE 2005 is a famous example).

We hope more economists join the study on causes and effects of ecosystem health. The coupling between the economy and ecosystems is becoming increasingly apparent, so it seems part of economists' job to illuminate it.