Environment, Health, and Human Capital
- (pp. 689-730)
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.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.51.3.689Additional Materials
JEL Classification
- 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