Ambient Ozone and Planting Decision: Evidence From US Crop Acreage

Abstract

This study leverages the variation in upwind ozone as an arguably exogenous shock for identification and quantifies the impact of ambient ozone on planted acreage of corn and soybeans. Highlighting the importance of behavioral responses, this study finds that a one-additional ppb of average ambient ozone reduces subsequent plantings of corn and soybean acreage by 1.59%–1.97%. Such ozone-induced acreage shrinkage is partially achieved through acreage shifts to less-ozone-sensitive crops. My prediction results suggest that, when ozone concentrations are projected to fall, the expected rise in corn and soybean production by 2050 would be underestimated by 43.41%–49.72% without considering acreage adjustment.