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Environment, Health, and Human Capital

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  • Joshua Graff Zivin
  • Matthew Neidell

Abstract

In this review, we discuss three major contributions economists have made to our understanding of the relationship between the environment and individual well-being. First, in explicitly recognizing how optimizing behavior, particularly in the form of residential sorting, can lead to nonrandom assignment of pollution, economists have employed a wide range of quasi-experimental techniques to develop causal estimates of the effect of pollution. Second, economic research has placed a considerable focus on the role of avoidance behavior, which is an important component for understanding the difference between biological and behavioral effects of pollution and for proper welfare calculations. Lastly, economic research has expanded the focus of analysis beyond traditional health outcomes to include measures of human capital, including labor supply, productivity, and cognition. Our review of the quasi-experimental evidence on this topic suggests that pollution does indeed have a wide range of effects on individual well-being, even at levels well below current regulatory standards. Given the importance of health and human capital as an engine for economic growth, these findings underscore the role of environmental conditions as an important factor of production.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jel.51.3.689
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Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Literature.

Volume (Year): 51 (2013)
Issue (Month): 3 (September)
Pages: 689-730

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Handle: RePEc:aea:jeclit:v:51:y:2013:i:3:p:689-730

Note: DOI: 10.1257/jel.51.3.689
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Cited by:
  1. Ziebarth, N. R.; & Schmitt, M.; & Karlsson, M.;, 2013. "The short-term population health effects of weather and pollution: implications of climate change," Health, Econometrics and Data Group (HEDG) Working Papers 13/34, HEDG, c/o Department of Economics, University of York.
  2. Teixeira, Aurora A.C. & Tavares-Lehmann, Ana Teresa, 2014. "Human capital intensity in technology-based firms located in Portugal: Does foreign ownership matter?," Research Policy, Elsevier, vol. 43(4), pages 737-748.
  3. Emmanuelle Lavaine & Matthew J. Neidell, 2013. "Energy Production and Health Externalities: Evidence from Oil Refinery Strikes in France," NBER Working Papers 18974, National Bureau of Economic Research, Inc.

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