Economic estimations of air pollution health nexus

Abstract

This paper estimates the influence of air pollution on population health outcomes through measuring direct and indirect pollution health effects. Multiple group studies show that air pollution increases population morbidities. The wealthy–health endogeneity link is discussed, and omitted variable biases of health impact assessments are addressed. Hausman specification test for regional panel data was performed, and the results were in favor of fixed effect estimations. The obtained data for 25 regions in Ukraine result that air emissions are causality factor for 10.3% of cardiovascular disease (CVD); 11% of gastrointestinal morbidity, 16% of respiratory morbidity, 10.5–30% of the lung cancer in industrial populations. Air pollution does not increase incidents of alcoholism and alcoholic psychosis, rubeola (measles), and diabetes. Average age, urbanization, and alcohol consumption are positive and significant factors in all CVD morbidity regressions. Total economic costs attributed to air pollution and selected morbidities range from 0.7 to 1.3% of the regional gross product (1.14–2.12 billion of USD). To internalize air pollution externalities, all air pollution taxes have to be raised up to 7–13 times to reach the level of Pigovian taxes.