APPLIED ECONOMICS AND POLICY Economic activity and


biodiversity in the United States Journal of Public Economics, 250, October 2025 LINK TO PAPER LINK TO IVAN RUDIK VIDEO


IVAN RUDIK


ASSOCIATE PROFESSOR Charles H. Dyson School


of Applied Economics and Management Cornell SC Johnson College of Business Cornell University


Co-authors • Ivan Rudik


Associate Professor, Charles H. Dyson School of Applied Economics and Management, Cornell SC Johnson College of Business, Cornell University


• Yuanning Liang, Peking University, Beijing, China • Eric Yongchen Zou, Ross School of Business, University of Michigan, Ann Arbor


Summary Economists have long been interested in understanding the implications of


economic activities on the natural environment. One well-known concept is externality, the market failure associated with the unpriced damage caused by byproducts of economic activities, such as air and water pollution. Humans are only one of the many species that may be affected by environmental exter- nalities. Pollution and habitat destruction can disrupt a wide range of wildlife, diminishing their ability to provide ecosystem services.


Tis paper provides new evidence on the link between economic activity and ecosystem decline using a novel dataset that compiles longitudinal ecologi- cal sampling information at tens of thousands of locations across the United States between 1960 and 2015. Local shocks in economic activities, such as those driven by national military buildups, led to a significant reduction in species abundance, diversity, and stability, with one-third of the observed effects explained by the causal impact of air pollution. Te authors find that government environmental regulations significantly mitigated pollution externalities.


CONTENTS TO MAIN


| RESEARCH WITH IMPACT: CORNELL SC JOHNSON COLLEGE OF BUSINESS • 2025 EDITION


18


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100