This Is Air: The “Nonhealth” Effects of Air Pollution

Abstract

A robust body of evidence shows that air pollution exposure is detrimental to health outcomes, often measured as deaths and hospitalizations. This literature has focused less on subclinical channels that nonetheless impact behavior, performance, and skills. This article reviews the economic research investigating the causal effects of pollution on nonhealth end points, including labor productivity, cognitive performance, and multiple forms of decision-making. Subclinical effects of pollution can be more challenging to observe than formal health care encounters but may be more pervasive if they affect otherwise healthy people. The wide variety of possible impacts of pollution should be informed by plausible mechanisms and require appropriate hypothesis testing to limit false discovery. Finally, any detected effects of pollution, in both the short and long run, may be dampened by costly efforts to avoid exposure ex ante and remediate its impacts ex post; these costs must be considered for a full welfare analysis. Expected final online publication date for the Annual Review of Resource Economics, Volume 14 is October 2022. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.