Measuring equity in environmental care: Methodology and an application to air pollution

The implementation of environmental policies varies substantially across geographical areas. This paper proposes a conceptual and methodological framework-adapted from the health economics literature- to assess equity in the allocation of environmental policy effort. We define "environmental care" as the set of local policy interventions aimed at improving environmental quality within an area, and evaluate its distribution relative to environmental need. Using direct and indirect standardization techniques, we measure horizontal inequity (unequal care among areas with similar need) and vertical inequity (differential care in response to differing needs). Applying this framework to traffic-related air pollution policies in Italian municipalities from 2012 to 2021, we find that the observed reduction of overall inequality in environmental care is mostly driven by a decline in horizontal inequity. However, we find evidence of persistent socioeconomic disparities, with lower-income municipalities receiving disproportionately less policy effort relative to their environmental needs.