Fine Dust is Coming Again: The Effect of Air Pollution on Health Using Seasonal Weather Patterns

Abstract

Air pollution, especially fine dust(PM10) and ultra-fine dust(PM2.5), adversely affects people’s health status. However, measuring its effect has been an ongoing debate in health economics and related fields. Air pollution levels are highly correlated to economic conditions (firms produce more during the economic boom increasing the air pollution levels and vice-versa during the recession), which affect individual decisions on medical expenditure and avoidance behavior. In this light, our study uses seasonal weather patterns (i.e., wind direction and wind speed) as instruments to measure and analyze the causal effect of air pollution(PM10 and PM2.5) on mortality. Instruments are robust and valid as seasonal wind patterns are known to affect the air pollution level while they are orthogonal to people's health. Our panel fixed instrumental variable regression results show the clear adverse effect of PM10 and PM2.5 on the number of deaths, especially the deaths caused by cardiovascular and respiratory diseases. Moreover, we also have found that the effect of PM2.5 is more detrimental to health than PM10.