Environment, Health, and Human Capital

66 Pages Posted: 5 Apr 2013 Last revised: 29 Mar 2023

See all articles by Joshua Graff Zivin

Joshua Graff Zivin

School of Global Policy and Strategy; National Bureau of Economic Research (NBER)

Matthew Neidell

Columbia University; University of Chicago - Department of Economics and CISES; PERC - Property and Environment Research Center

Date Written: April 2013

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 non-random 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.

Suggested Citation

Graff Zivin, Joshua and Neidell, Matthew, Environment, Health, and Human Capital (April 2013). NBER Working Paper No. w18935, Available at SSRN: https://ssrn.com/abstract=2245444

Joshua Graff Zivin (Contact Author)

School of Global Policy and Strategy ( email )

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National Bureau of Economic Research (NBER)

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Matthew Neidell

Columbia University ( email )

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University of Chicago - Department of Economics and CISES ( email )

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PERC - Property and Environment Research Center

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