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Nov 15, 2023 2023-11 Faculty Finance Research in Education

New study estimates long-term health impact of air pollution

Because of the air pollution it can blow your way, wind direction may have a significant impact on how long you live, according to research from Gies College of Business. Living downwind from a chronic pollution source could take years off your life and, according to the study, even a fleeting increase in air pollution exposure could bring significant health risks to vulnerable individuals.

“The Long-run Effect of Air Pollution on Survival,” coauthored by Gies associate professors Tatyana Deryugina and Julian Reif (right), measured the relationship between daily wind direction and sulfur dioxide (SO2) concentrations at the county level. Their results show that, in the 30 days following exposure, acute SO2 exposure kills frail individuals with already short life expectancies and also speeds up mortality among healthier individuals – an effect they call “accelerated aging.” The key contribution of the paper, however, is learning what these short-run estimates imply for the effects of long-run chronic exposure.

Measuring the direct effects of chronic exposure has been challenging because there are few good “natural experiments” where chronic pollution exposure is as good as randomly assigned, and correlational studies of chronic exposure and survival can easily produce biased estimates. Deryugina and Reif propose to get around this challenge by combining high-quality short-run estimates with a sophisticated demographic model. After doing so, Deryugina and Reif calculated that a permanent, 10 percent decrease in pollution exposure at birth improves life expectancy by 1.2-1.3 years.

This study is part of a broader examination of the intersection of health and the environment from researchers at the Center for Business and Public Policy (CBPP) at Gies Business, which analyzes programs and policies that shape the US economy.

“Everyone knows pollution is bad for you. Our paper looks at the long-term impact of pollution on people’s health in order to better quantify how much money and effort should be put into reducing pollution levels,” said Reif, who recently presented the findings at the National Bureau of Economic Research Summer Institute.

A novel way to isolate random changes in air pollution

“It’s difficult to measure the impact of pollution on people’s health because the people who live in places with elevated pollution levels differ from people who live in less polluted regions,” said Reif. “If low-income individuals live in a more polluted area and suffer from poor health outcomes, is it because of the pollution or because they have difficulty accessing the healthcare system?”

“So, we identified a natural experiment – which way the wind blows – that impacts everyone equally,” he said. “Wind direction is a very strong determinant of pollution. And we can measure not only levels we notice – like pollution levels rising 30% because of wildfires hundreds of miles away – but also smaller changes that the average person’s nose wouldn’t detect.”

For example, if the wind blows from the west in southern California, that’s clean ocean air versus more polluted inland air that blows from the east. Conversely on the East Coast, cleaner air blows westward from the Atlantic Ocean. More generally, changes in wind direction are associated with changes in pollution levels across the United States, with the exact relationship varying geographically.

Even one day of exposure impacts health

These findings build on a 2019 paper that looked at elderly mortality and medical costs from an acute, one-day exposure to air pollution, with was co-authored by Deryugina, Reif, Garth Heutel of Georgia State University, and fellow Gies professors David Molitor and Nolan Miller. “That paper found that even though it's quite expensive to reduce air pollution levels, if you add up the mortality costs of being exposed to air pollution, we find that it's bigger than the cost of further reductions in air pollution,” said Reif.

“Our new paper confirms that people should care not only about contemporaneous pollution exposure, but they also need to understand that the consequences of early-life exposure can materialize at much older ages,” said Deryugina (right). “The good news is that the 1970 Clean Air Act has significantly reduced pollution. Our estimates suggest that that its benefits are large, and the people born soon after its passage will experience the vast majority of those benefits over the next several decades.”

Deryugina makes the analogy that smokers are not likely to get cancer in their twenties, but if they smoke regularly over time, this can lead to lung cancer in their late fifties or sixties.

“Our model suggests that while you may not notice air pollution impacting your health today, you will when you’re in your 70s or 80s,” said Reif.

True health costs likely underestimated

Deryugina said they were surprised to see that air pollution’s impact on health goes well beyond those with lung disease or other respiratory problems. Air pollution also likely shortens the life expectancy of those with infections such as meningitis and pneumonia.

Deryugina and Reif say the research’s major contribution is the development and application of a new framework for estimating the long-run survival effects of chronic exposure to environmental hazards. They say looking solely at the short-term impact of pollutants will result in policies and laws that underestimate the true health costs of air pollution.

“The goal of environmental economics is not to minimize harm, but to make sure that any harm that's caused by an action has a corresponding benefit. Modern economies cannot function with zero air pollution,” added Deryugina. “Our findings suggest that the benefits of reducing air pollution are large, and that estimates that don't take chronic exposure into account are probably significantly undervaluing the long run benefits of air pollution reduction.” 

Wildfire Impact on labor market

Health outcomes are not the only focus of the Center for Business and Public Policy. Associate Professor of Finance David Molitor and Mark Borgschulte, an assistant professor of economics at Illinois, recently co-authored a paper that analyzes how drifting wildfire smoke impacts the labor market. It concludes that smoke exposure can decrease labor income, employment and labor force participation rates across a wide variety of sectors, including manufacturing, crop production, utilities, health care, real estate, administration, and transportation.