Human capital is an important component of economic growth. The article extends a theoretical model for comprehensive national accounting to the welfare effects of pollution on human capital. The model includes a production externality in the form of a flow of air pollutants that cause both direct disutility and indirect welfare effects by negatively affecting the productivity of labor. We show that defensive medical expenditures or healthcare costs allocated to mitigating the disutility of air pollution should not be deducted from conventional net national product (NNP), whereas the value of the percieved disutility of illness episodes caused by pollution should be subtracted from NNP. We derive a marginal cost-benefit rule for an optimal level of pollution given its negative health effects. The rule can be used for determining an optimal tax on harmful emissions. Finally, we outline a scheme for empirical comprehensive accounting and for estimation of an emissions tax.
Download Info
To our knowledge, this item is not available for
download. To find whether it is available, there are three
options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page
whether it is in fact available.
3. Perform a search for a similarly titled item that would be
available.
Publisher Info
Paper provided by National Institute of Economic Research in its series Working Paper with number
82.
Length: 32 pages Date of creation: 14 May 2003 Date of revision: Handle: RePEc:hhs:nierwp:0082
Note: This paper is published as: Huhtala,A. and E. Samakovlis (2007), "Flows of Air Pollution, Ill Health and Welfare", Environmental and Resource Economics, 37 (2) Contact details of provider: Postal: National Institute of Economic Research, P.O. Box 3116, SE-103 62 Stockholm, Sweden Phone: 46-(0)8-453 59 00 Fax: 46-(0)8-453 59 80 Email: Web page: http://www.konj.se/ More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Britta Larsson).
Related research
Keywords:
This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)