Estimating the causal effect of redlining on present-day air pollution

Recent studies have shown associations between redlining policies (1935-1974) and present-day fine particulate matter (PM$_{2.5}$) and nitrogen dioxide (NO$_2$) air pollution concentrations. In this paper, we move beyond associations and investigate the causal effects of redlining using spatial causal inference. Redlining policies were enacted in the 1930s, so there is very limited documentation of pre-treatment covariates. Consequently, traditional methods failed to sufficiently account for unmeasured confounders, potentially biasing causal interpretations. By integrating historical redlining data with 2010 PM$_{2.5}$ and NO$_2$ concentrations, our study seeks to estimate the long-term causal impact. Our study addresses challenges with a novel spatial and non-spatial latent factor framework, using the unemployment rate, house rent and percentage of Black population in 1940 US Census as proxies to reconstruct pre-treatment latent socio-economic status. We establish identification of a causal effect under broad assumptions, and use Bayesian Markov Chain Monte Carlo to quantify uncertainty. Our causal analysis provides evidence that historically redlined neighborhoods are exposed to notably higher NO$_2$ concentration. In contrast, the disparities in PM$_{2.5}$ between these neighborhoods are less pronounced. Among the cities analyzed, Los Angeles, CA, and Atlanta, GA, demonstrate the most significant effects for both NO$_2$ and PM$_{2.5}$.