| Abstract |
This paper aims to show how the price of home heating can affect adverse birth outcomes when mothers are exposed to cold temperatures. To this end, I leverage geographical variation in the energy used for home heating, temporal variation in natural gas prices triggered by the fracking boom, and variation in exposure to cold temperatures. By analyzing the natality data in the US for 2001-2015, I find robust evidence that higher heating prices are associated with very preterm birth when pregnant women are exposed to temperatures cold enough to require home heating. As a possible mechanism for this result, I examine the role of the “heat or eat” trade-offs. When heating prices rise, households may use less heating. However, if the price elasticity of heating demand is less than one, energy spending will increase, reducing the budget for other goods. Consistent with this hypothesis, I find the rise in energy expenses and the reduction in food expenditures. The heterogeneity analyses reveal that the detrimental effect of higher heating prices is stronger in poorer counties and non-Hispanic black mothers. Back-of-the-envelope calculation implies the substantial reduction in natural gas prices in the late 2000s prevented approximately 2,200 very preterm births per year.
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