Presented at: LSE Environment Camp, IPWSD (Columbia), MWIEDC
Sand, the backbone of modern construction, makes up 85% of global mineral extraction. Its large-scale removal—especially from fragile river ecosystems—has raised serious environmental concerns, particularly in developing countries experiencing construction booms and lacking strong environmental regulation. Yet, the full extent of these effects, their social and economic consequences, and how they are distributed across communities remain poorly understood. This project combines novel administrative data with satellite imagery in a difference-in-differences framework to estimate the causal impacts of sand mining in Bihar, India. We find that sand mining increases flood inundation rates and flood frequency by 1.5 and 2 percentage points, respectively, from a baseline of 10%. Agricultural output, measured by vegetation index, declines by 5%. Despite these environmental costs, sand mining raises local income—proxied by nightlight intensity—by 10–20% in nearby villages. Income gains are broadly distributed within villages, reaching both wealthier and poorer households, but are concentrated among socially dominant groups, particularly upper castes and OBCs. These findings help explain why illegal sand mining continues with local support despite environmental harm and regulatory efforts. The unequal balance of economic benefits on social groups highlights the need for targeted policies—those that mitigate flooding, ensure sustainable mining, and compensate marginalized communities bearing the brunt of net harm. To characterize the mechanisms for heterogeneous effects of sand mining, we are now beginning a large-scale field survey.