Abstract

A pervasive problem in estimating the costs of pollution is that optimizing individuals may compensate for increases in pollution by reducing their exposure, resulting in estimates that understate the full welfare costs. To account for this issue, measurement error, and environmental confounding, we estimate the health effects of ozone using daily boat traffic at the port of Los Angeles as an instrumental variable for ozone. We estimate that ozone causes at least $44 million in annual costs in Los Angeles from respiratory related hospitalizations alone and that the cost of avoidance behavior is at least $11 million per year.

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Additional Information

ISSN
1548-8004
Print ISSN
0022-166X
Pages
pp. 154-175
Launched on MUSE
2012-04-04
Open Access
No
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