Applied Econometrics
My applied econometrics research focuses on using causal inference methods to understand the relationship between environmental quality and socioeconomic outcomes. I study how air pollution affects productivity, health, well-being, and behavior — from court decisions in India to crime rates in Mexico City. My work also evaluates the effectiveness of environmental policies such as Low Emission Zones in European cities.
Air Pollution & Productivity
Studying how air quality affects the productivity of high-skill labor, using novel identification strategies and large administrative datasets.
Environmental Policy Evaluation
Evaluating the causal effects of environmental regulations like Low Emission Zones on air quality, well-being, and unintended consequences.
Pollution & Human Behavior
Investigating the nonlinear effects of pollution on crime, court decisions, school attendance, and other behavioral outcomes.
Published (7)
The Air Quality Effects of Uber
Luis Sarmiento, Yeong-Jae Kim
Journal of Urban Economics (Conditional Acceptance)
Research Question
Does the entry of ride-sharing services like Uber causally improve urban air quality?
Key Findings
- The air quality index declines by approximately 1–2% in the year of Uber's entry into a city.
- The probability of unhealthy air quality episodes falls by 8–18% following Uber's introduction.
- Improvements result from substituting trips in older, less fuel-efficient vehicles with Uber rides in newer, cleaner cars.
Occupation and Temperature-Related Mortality in Mexico
R. Daniel Bressler, Andrew Papp, Luis Sarmiento, Jeffrey Shrader, Alyssa Wilson
Journal of Human Resources (Advance online publication)
Research Question
How does occupation shape vulnerability to temperature-related mortality in developing countries?
Key Findings
- Agricultural workers aged 15–24 are over 10 times more likely to die from heat than peers in professional or managerial jobs.
- People under 35 account for 75% of heat-related deaths — overturning the assumption that elderly populations are most vulnerable.
- Occupation is a critical and previously underappreciated driver of climate vulnerability in developing countries.
The Air Quality and Well-Being Effects of Low Emission Zones
Luis Sarmiento, Nicole Wägner, Aleksandar Zaklan
Journal of Public Economics 277, 105014
Research Question
Do low emission zones improve air quality and well-being, or do they produce unintended consequences?
Key Findings
- German LEZs reduce PM10 and NO2, but produce unintended increases in ozone and pollution spillovers into adjacent areas.
- Despite health benefits, LEZs cause transitory yet long-lasting reductions in residents' life satisfaction.
- The subjective well-being costs of restricted mobility appear to outweigh the perceived gains from improved health.
Air Pollution and Court Decisions: Evidence from Ten Million Penal Cases in India
Luis Sarmiento, Adam Nowakowski
Environmental and Resource Economics 86, 605–644
Research Question
Does air pollution exposure affect judicial decision-making in criminal cases?
Key Findings
- Higher air pollution exposure leads to significantly more convictions by Indian judges across 10 million penal cases.
- Reducing average pollution by one standard deviation could lead to up to 145,000 fewer convictions among active cases.
- The mechanism operates through pollutants altering brain chemistry — causing fatigue, unstable risk preferences, and greater propensity to punish.
The Nonlinear Effects of Pollution on Crime: Evidence from Mexico City and New York
Luis Sarmiento
Environmental Research — Health 1(2), p.021001
Research Question
Is the relationship between air pollution and crime linear, or does it follow a more complex nonlinear pattern?
Key Findings
- Air pollution and crime follow an inverted U-shape: pollution first increases criminality, then decreases it at very high levels.
- Crime peaks at NowCast AQI values of ~150 and 116 in Mexico City; beyond these thresholds, avoidance behavior dominates.
- Analysis uses 2.9 million hourly observations — prior linear models may have mischaracterized the pollution-crime relationship.
Air Pollution and the Productivity of High-Skill Labor: Evidence from Court Hearings
Luis Sarmiento
Scandinavian Journal of Economics 124, 301–332
Research Question
Does air pollution affect the productivity of high-skill cognitive work?
Key Findings
- A 10 μg/m³ increase in PM2.5 lengthens court hearings by 6.8%; a 10 ppb increase in NO2 adds 5.1%.
- Reducing PM2.5 by 10 μg/m³ would save ~81,712 hearing minutes — equivalent to 56 days of court time.
- First evidence that air pollution impairs high-skill cognitive work, not just physical labor productivity.
The Effects of the 2013 Floods on Germany's Road Freight Traffic
Julio G. F. Gabela, Luis Sarmiento
Transportation Research Part D, S.1022774
Research Question
How did the 2013 floods disrupt road freight traffic across Germany's national road network?
Key Findings
- The 2013 floods affected 10% of all automatic traffic counters and 23% of all main roads in Germany.
- First study to quantify climate-related freight traffic variations across an entire national road network.
- Time-series outlier detection endogenously identifies affected counters and estimates the magnitude and duration of disruptions.
Revise & Resubmit (3)
Emergency Room Visits and Temperature: Evidence from Mexico
Luis Sarmiento, Francesco Pietro Colelli, Filippo Pavanello
Journal of Economic Behavior and Organization (Revise and Resubmit)
Working paper: RFF Working Paper 25-11
Research Question
How do temperatures affect emergency department visits in a developing country, and do the effects differ from mortality patterns?
Key Findings
- Cold temperatures reduce ED visits by up to 8.9% on the same day and cumulatively by 16.3% over 30 days; warm temperatures increase visits by up to 3.6%.
- Unlike mortality, which shows a U-shaped response, ED visits respond approximately linearly to temperature — with limited harvesting for heat.
- Children and teenagers are more sensitive to heat; older populations are more vulnerable to cold. Climate projections indicate ED usage will rise, adding an estimated $86 million in annual medical costs by midcentury.
Income Shocks, Adaptation, and Temperature-Related Mortality: Evidence from the Mexican Labor Market
Luis Sarmiento, Martino Gilli, Filippo Pavanello, Soheil Shayegh
Journal of the Association of Environmental and Resource Economists (Reject and Resubmit)
Working paper: CESifo Working Paper No. 11542 · DOI: 10.2139/ssrn.5067963
Research Question
Can positive income shocks help workers adapt to extreme temperatures and reduce temperature-related mortality?
Key Findings
- A 2019 wage and fiscal reform in Mexican border municipalities significantly reduced temperature-related mortality in treated areas.
- Income gains increased adaptive capacity through higher electricity expenditures and the purchase of electric heaters.
- Results provide causal evidence that redistribution policies funded by carbon taxes can simultaneously address climate vulnerability and socioeconomic inequality.
Recycling in a Globalised Economy
Eugénie Joltreau, Luis Sarmiento
Empirical Economics (Revise and Resubmit)
Working paper: RFF Working Paper 25-19
Research Question
How do material imbalances between countries and recycling policies shape international waste trade?
Key Findings
- Countries experience material imbalances — disparities between production material needs and consumption waste — that drive international waste trade flows.
- Gravity model estimates show an elasticity of 0.8 between country-pair material imbalances and waste exports, confirming their role as a key determinant.
- Poorly designed recycling policies may encourage waste exports to developing countries rather than enhance domestic recycling, raising environmental and ethical concerns.
Working Papers (7)
When the Boundary Layer Drops: Air Quality and Healthcare Use in Mexico
Piero Basaglia, Luis Sarmiento
Working paper: CESifo Working Paper No. 11901 · DOI: 10.2139/ssrn.5263620
Research Question
What is the causal impact of PM2.5 on emergency department demand across health conditions in a developing country?
Key Findings
- A marginal increase in PM2.5 leads to a 2.3% rise in emergency department visit rates, using boundary layer height as a quasi-random instrument.
- Effects vary significantly by age group and exposure levels, with most increases driven by respiratory conditions.
- First nationwide assessment of air pollution-attributable ED demand in a developing country, covering the universe of public hospital triage visits in Mexico.
The Unintended Consequences of Low Emission Zones: Evidence from Madrid Central
Adrián Santonja, Luis Sarmiento, Nicole Wägner
Research Question
Did Madrid's low emission zone improve city-wide air quality and health, or did it produce unintended consequences?
Key Findings
- While pollution fell within the restricted area, it increased in neighboring zones — leading to worse city-wide air quality overall.
- Aggregate effects suggest an increase in annual all-cause mortality of more than 900 additional deaths (3.7%).
- The policy exacerbated disparities in pollution exposure between high- and low-income neighborhoods.
Racial Inequalities in Regional Air Pollution Exposure in Mexico
Luis Sarmiento, Raúl Gutiérrez-Meave
Research Question
Is there a persistent gap in air pollution exposure between Indigenous and non-Indigenous communities in Mexico, and what drives it?
Key Findings
- Indigenous municipalities face a persistent PM2.5 exposure gap of more than 1 μg/m³ compared to non-Indigenous areas.
- Cooking fuel differences explain up to 14% of the gap; atmospheric and orographic conditions account for up to 40%, linked to historical displacement into rugged terrain.
- Equalizing biofuel cooking shares could prevent ~120 premature deaths annually, with benefits of up to $26 million USD.
The Transnational Effect of Temperature on Remittances
Gonzalo Ares de Parga-Regalado, Daniel Osuna-Gomez, Luis Sarmiento
Research Question
How do temperature shocks in both the US and Mexico affect remittance flows to Mexican municipalities?
Key Findings
- Remittances to Mexico increase when temperatures are abnormally high or low in Mexico, reflecting greater need in origin communities.
- Remittances decrease when US temperatures are extreme, as heat and cold negatively affect migrant labor outcomes in destination communities.
- Uses transnational data on undocumented migrant networks to trace the climate-remittance channel across borders.
Inflation Smoothing Through Natural Disaster Relief Funds
Jesús Arellano, Irving Llamosas, Irving McLiberty, Luis Sarmiento, Diego Solórzano
Research Question
Does Mexico's disaster relief fund (FONDEN) smooth or amplify post-disaster inflation?
Key Findings
- Municipalities receiving FONDEN support experience lower cumulative inflation during the first 4–5 months post-disaster, as timely aid mitigates supply constraints.
- From 8 to 11 months after a disaster, inflation rises in treated areas, reflecting inflationary pressures from accelerated infrastructure investment.
- Uses a fuzzy regression discontinuity design exploiting exogenous rainfall thresholds for FONDEN eligibility.
The Air Quality, Health, and Labor Supply Effects of Crop-Residue Burning
Luis Sarmiento, Jesús Arellano-González
Research Question
What are the causal effects of agricultural crop-residue burning on air pollution, health, and labor supply in Mexico?
Key Findings
- Each additional burn within 25 km raises monthly PM2.5 by 0.022 μg/m³, increases mortality by 0.057%, and reduces daily labor supply by 0.066 minutes per worker.
- A 10% reduction in agricultural burns could yield over $16 million USD in annual social benefits.
- 55% of benefits relate to lower mortality, 44% to reduced labor supply losses, and 1% to fewer ED admissions.
Indoor Air Quality and Student Welfare: The Effect of Air Purifiers in Schools
Jacopo Bonan, Francesco Granella, Stefania Renna, Luis Sarmiento
Working paper: RFF Working Paper 25-17
Research Question
Can air purifiers in schools reduce children's exposure to pollution and improve attendance, learning, and well-being?
Key Findings
- Air purifiers reduce indoor PM2.5 concentrations by 32% and decrease student absenteeism by 12.5% in a cluster RCT across 95 primary school classes.
- Effects are larger among students with higher pre-treatment absenteeism; treated students report fewer respiratory symptoms and greater air quality awareness.
- Impact is greater when outdoor pollution is relatively low and diminishes as outdoor pollution intensifies, consistent with nonlinear marginal effects of air quality on health.