Biases in estimates of air pollution impacts: the role of omitted variables and measurement errors

TL;DR

This paper investigates the direction of measurement error and omitted variable biases in air pollution impact estimates, demonstrating they are typically negative under realistic assumptions through theory, simulations, and empirical validation.

Contribution

It provides a theoretical and empirical analysis of bias directions in air pollution studies, clarifying misconceptions about measurement error effects and introducing a validation scheme.

Findings

OVB is typically negative under positive pollutant correlation and nonpositive effects.

MEB for null or perfectly measured pollutants is often negative.

Empirical validation confirms biases tend to be negative in crop yield data.

Abstract

Observational studies often use linear regression to assess the effect of ambient air pollution on outcomes of interest, such as human health indicators or crop yields. Yet pollution datasets are typically noisy and include only a subset of the potentially relevant pollutants, giving rise to both measurement error bias (MEB) and omitted variable bias (OVB). While it is well understood that these biases exist, less is understood about whether these biases tend to be positive or negative, even though it is sometimes falsely claimed that measurement error simply biases regression coefficient estimates towards zero. In this paper, we study the direction of these biases under the realistic assumptions that the concentrations of different types of air pollutants are positively correlated with each other and that each type of pollutant has a nonpositive association with the outcome variable. We demonstrate both theoretically and using simulations that under these two assumptions, the OVB will typically be negative and that more often than not the MEB for null pollutants or for pollutants that are perfectly measured will be negative. We also use a crop yield and air pollution dataset to show that these biases tend to be negative in the setting of our motivating application. We do this by introducing a validation scheme that does not require knowing the true coefficients. While this paper is motivated by studies assessing the effect of air pollutants on crop yields, the findings are also relevant to regression-based studies assessing the effect of air pollutants on human health outcomes. The validation scheme can also be used to empirically study OVB or MEB in other contexts.