Lecture 9: Health economics

what were the 2020 economic benefits of the clean air act compared to its costs?

cost: $65 billion

benefit: $2 trillion

• 1.9 trillion of benefits came from improvements in our health

what are examples of how air pollution impacts the economy negatively

• when air quality is bad flights get canceled → miss work, etc

• solar panels covered in dirt/dust lower energy being collected → consumer has to pay more

• crops getting damaged due to ozone damage → farmers can’t sell

• nitrogen leads to excess nutrients in water → harmful algae → oxygen depletion in water

• Emission control systems required by EPA at power plants are expensive → consumers have to pay for it though electricity bill

clean air impact on air pollution and economy in the last 50 years?

• population and economy are still growing

• air pollution emissions have gone down

what are the key information needed to estimate the health and economic effects of air pollution exposure?

1. air pollution exposure

2. exposure-response relationship

3. population

4. underlying health

5. economic valuation

how is economic benefit estimated?

through avoided hospitalization- people can avoid paying medical bills, treatment, etc.