Time: 12:15 pm – 1:30pm
Date: 29th March 2019
Place: Room 3001.
Antoine Dechezleprêtre (OCDE, LSE) – “The economic cost of air pollution: Evidence from Europe”

Abstract:

We provide the first evidence that air pollution causes economy-wide reductions in market economic activity. We combine satellite-based measures of air pollution with statistics on regional economic activity throughout the European Union since 2000. We use an instrumental variables approach, based on both thermal inversions and the direction of prevailing wind, to identify the causal impact of air pollution on economic activity. We estimate that a 10 percent increase in fine particulate matter concentrations causes a 1.1% reduction in gross domestic product, with 76 percent of this impact due to reductions in productivity and the remaining 24 percent due to reductions in population. Our estimates suggest that the economic benefits of reducing air pollution are much larger than previously thought, and of similar magnitude to the benefits associated with reductions in mortality.

Organizers:
Guy Meunier (CREST)
Sponsors:
This seminar is partially supported by Labex, Chaire Développent Durable École Polytechnique – EDF, Chaire Finance Durable et Investissement Responsable, et Chaire Énergie et Prosperité

Time: 12:15 pm – 1:30pm
Date: 29th March 2019
Place: Room 3001.
Antoine Dechezleprêtre (OCDE, LSE) – “The economic cost of air pollution: Evidence from Europe”

Abstract:

We provide the first evidence that air pollution causes economy-wide reductions in market economic activity. We combine satellite-based measures of air pollution with statistics on regional economic activity throughout the European Union since 2000. We use an instrumental variables approach, based on both thermal inversions and the direction of prevailing wind, to identify the causal impact of air pollution on economic activity. We estimate that a 10 percent increase in fine particulate matter concentrations causes a 1.1% reduction in gross domestic product, with 76 percent of this impact due to reductions in productivity and the remaining 24 percent due to reductions in population. Our estimates suggest that the economic benefits of reducing air pollution are much larger than previously thought, and of similar magnitude to the benefits associated with reductions in mortality.

Organizers:
Guy Meunier (CREST)
Sponsors:
This seminar is partially supported by Labex, Chaire Développent Durable École Polytechnique – EDF, Chaire Finance Durable et Investissement Responsable, et Chaire Énergie et Prosperité