The paper investigates the economic value of clean air by analyzing its impact on housing values using the Clean Air Act Amendments (CAAA) as a quasi-experimental tool. It exploits the structure of the CAAAs, which imposed strict regulations on polluters in "nonattainment" counties—those exceeding federal air quality standards. The study finds that nonattainment status is strongly correlated with reductions in total suspended particulates (TSPs) pollution and increases in housing prices. Using nonattainment status as an instrumental variable, the authors estimate that the elasticity of housing values with respect to TSPs concentrations ranges from -0.20 to -0.35. This suggests that a 1-μg/m³ decrease in TSPs is associated with a 0.05-0.10% increase in property values. The estimates are less sensitive to model specification than cross-sectional and fixed effects estimates, which often show perverse signs. The study also finds that the marginal benefit of pollution reductions is lower in communities with higher pollution levels, consistent with preference-based sorting. Overall, the improvements in air quality from the mid-1970s TSPs nonattainment designation are associated with a $45 billion aggregate increase in housing values in nonattainment counties between 1970 and 1980. The paper highlights the importance of addressing econometric identification problems, such as omitted variables and self-selection bias, in estimating the hedonic price function for clean air. The results demonstrate that the hedonic method can provide reliable estimates of the marginal willingness-to-pay for environmental amenities when properly applied.The paper investigates the economic value of clean air by analyzing its impact on housing values using the Clean Air Act Amendments (CAAA) as a quasi-experimental tool. It exploits the structure of the CAAAs, which imposed strict regulations on polluters in "nonattainment" counties—those exceeding federal air quality standards. The study finds that nonattainment status is strongly correlated with reductions in total suspended particulates (TSPs) pollution and increases in housing prices. Using nonattainment status as an instrumental variable, the authors estimate that the elasticity of housing values with respect to TSPs concentrations ranges from -0.20 to -0.35. This suggests that a 1-μg/m³ decrease in TSPs is associated with a 0.05-0.10% increase in property values. The estimates are less sensitive to model specification than cross-sectional and fixed effects estimates, which often show perverse signs. The study also finds that the marginal benefit of pollution reductions is lower in communities with higher pollution levels, consistent with preference-based sorting. Overall, the improvements in air quality from the mid-1970s TSPs nonattainment designation are associated with a $45 billion aggregate increase in housing values in nonattainment counties between 1970 and 1980. The paper highlights the importance of addressing econometric identification problems, such as omitted variables and self-selection bias, in estimating the hedonic price function for clean air. The results demonstrate that the hedonic method can provide reliable estimates of the marginal willingness-to-pay for environmental amenities when properly applied.