Paper Number: 2018-03
Document Date: 5/2018
Author(s): Jina J. Kim, Daniel A. Axelrad, and Chris Dockins
Subject Area(s): Economic Damages/Benefits, Valuation Methods, Children's Health
JEL Classification: D61, I18, J13, Q51, Q53
Keywords: air pollution, preterm birth, benefits, PM2.5
Abstract: Preterm birth (PTB) is a predictor of infant mortality and later-life morbidity. Despite recent declines, PTB rates remain high in the United States. Growing research suggests a relationship between a mother’s exposure to air pollution and PTB of her baby. Many policy actions to reduce exposure to common air pollutants require benefit-cost analysis (BCA), and it’s possible that PTB will need to be included in BCA in the future. However, an estimate of the willingness to pay (WTP) to avoid PTB risk is not available, and a comprehensive alternative valuation of the health benefits of reducing pollutant-related PTB currently does not exist. This paper demonstrates a potential approach to assess economic benefits of reducing PTB resulting from environmental exposures when an estimate of WTP to avoid PTB risk is unavailable. We utilized a recent meta-analysis and county-level air quality and PTB data to estimate the potential health and economic benefits of a reduction in air pollution-related PTB, with fine particulate matter (PM2.5) as our case study pollutant. Using this method, a simulated 10% decrease from 2008 PM2.5 levels resulted in a reduction of 5,016 PTBs and savings of at least $339 million, potentially reaching over one billion dollars when considering later-life effects of PTB.
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