Pollution affects a wide range of health outcomes, and these effects are nontrivial even at current emissions levels in the developed world. The optimal level of these pollutants is highly contested. For example, a proposed ozone standard issued by the EPA in 1997 was finally upheld by the Supreme Court in 2002, but only after endless appeals and lengthy lawsuits initiated by states and industry (Bergman, 2004). Better estimates of the relationship between pollution and health and society’s WTP for improvements in pollution through the use of quasi-experimental research designs offers an important tool for informing this debate. Additional work on the measurement of avoidance behavior and its costs remains a critical piece of the puzzle.
Despite the growth of quality evidence on this topic, one area in need of more evidence is on the long-run effects from cumulative exposure to various pollutants. Although it is clear that pollution has short-run impacts, the potential impacts from exposure over a lifetime may be considerably larger, as hinted at by the results from Almond et al. (2009). These impacts may also affect people’s investment decisions throughout their life course, suggesting a wide range of potential economic outcomes that may be affected. The empirical issues are more daunting given the challenges in appropriately measuring health outcomes and pollution exposure, and the ability to isolate exogenous variation in pollution, but nonetheless deserve more attention.
The impact of pollution on human capital formation and its deployment in school as well as labor markets also represents a particularly fruitful area for additional exploration. The use of these indirect outcomes can capture a broader range of economic impacts, and they also have the ability to capture subtle, but likely more pervasive health impacts than those captured through standard measures of mortality and hospitalizations. As the improvement in biomedical understanding of the etiology of disease continues, this area of study is likely to rise in frequency and importance.
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