Nearly every country in the world regulates air pollution. But how much pollution control is enough? Answering that question requires considerable information about the costs as well as the benefits of regulation. Historically, efforts to measure benefits have focused on averting major health insults, such as respiratory or cardiovascular events that result in hospitalizations or death, which typically only afflict the most vulnerable segments of the population. These health episodes are clearly consequential—e.g., the U.S. Clean Air Act Amendments of 1990 avert an estimated 160,000 deaths and 86,000 hospitalizations annually (1)—but may only represent the tip of the proverbial iceberg, compared to the number of cases of respiratory impairment and other health insults that affect many healthy people every day but do not require hospitalizations or even formal health care encounters.

The ubiquity of these less lethal impacts, revealed by emerging economic research on labor productivity and human capital accumulation, suggests that even modest impacts at the individual level can add up to considerable, society-wide impacts across the globe.

Air Pollution's Hidden Impact. Joshua GraffZivin & Matthew Niedell.