The healthcare costs of air pollution in France

This study estimates the short-term healthcare costs of exposure to fine particulate matter (PM2.5) in France, where pollution levels are well below current European Union air quality standards. Using administrative data on healthcare expenditure for a representative population sample from 2015 to 2018, combined with high-resolution geospatial data on pollution and meteorological conditions, I implement an instrumental variable strategy that exploits exogenous variation in pollution driven by altitude weather patterns. I find that even moderate increases in PM2.5 significantly raise weekly healthcare costs, with estimated effects two to six times larger than those found in prior studies. Effects are observed across all age groups and in various medical specialties, including cardiology, pulmonology, and neurology. The findings suggest a concave dose-response relationship, with larger marginal effects at lower pollution levels. Aligning pollution concentrations with the WHO’s 2021 guideline could lead to annual savings of €6.44–8.67 billion, which far exceed estimated abatement costs. These results provide a strong economic justification for more ambitious air quality regulations.