Research | Air Quality, Health and Location Choice*

* This paper is published as: Pan, S., 2023. Health, air pollution, and location choice. Journal of Environmental Economics and Management, 119, p.102794.

What is the effect of air-quality-related health shocks on a household's location choice? This paper provides direct evidence that an air-quality-related health shock changes how a household evaluates the importance of clean air and incentivizes relocation towards better air quality. I also provide estimates of the increased marginal willingness to pay for air quality contributed by the health shocks.

For illustration, the probability that a household with at an adult diagnosed with asthma chooses to live in Los Angeles county would decrease from 0.0464 to 0.0459 (-0.95%) as a result of a 10-point increase in Air Quality Index. For a family with a pregnant member, the probability would decrease from 0.0594 to 0.0592 (-0.38%). 

The additional increase in the marginal willingness to pay for a unit of reduction in AQI induced by being diagnosed with asthma as an adult is estimated to be $14.08; the same number induced by being pregnant is $4.97 (in 1982-1984 constant dollars).

Aliens agree that (a) pollution is bad for your body and (b) it's better to move away from it. Source: SMBC Comics.