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Journal of Economic Literature: Vol. 51 No. 3 (September 2013)

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Environment, Health, and Human Capital

Article Citation

Graff Zivin, Joshua, and Matthew Neidell. 2013. "Environment, Health, and Human Capital." Journal of Economic Literature, 51(3): 689-730.

DOI: 10.1257/jel.51.3.689

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 nonrandom 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.

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Authors

Graff Zivin, Joshua (U CA, San Diego)
Neidell, Matthew (Columbia U)

JEL Classifications

I12: Health Production
I31: General Welfare
J24: Human Capital; Skills; Occupational Choice; Labor Productivity
Q51: Valuation of Environmental Effects
Q53: Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling


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