Heating Price and Infant Health

This paper shows 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 type of energy used for home heating, temporal variation in natural gas prices triggered by the fracking boom, and variation in exposure to cold temperatures. Using the birth record in the US for 2001-2015, I find evidence that higher home-heating prices increase the risk of serious birth conditions such as very preterm birth when pregnant women are exposed to cold temperatures. As a potential mechanism, I examine how rising heating prices force households to reallocate spending: despite possibly reducing heating use, if the demand for heating is inelastic, it will leave less budget for other goods. Consistent with this hypothesis, I find that higher energy prices increase energy expenses and reduce healthcare expenditures. Heterogeneity analysis reveals that the detrimental impact of higher heating prices is pronounced in economically disadvantaged subpopulations.