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The Mortality and Medical Costs of Air Pollution: Evidence from Changes in Wind Direction

Journal: American Economic Review

Date: 20191201

Author: Deryugina, Tatyana; Heutel, Garth; Miller, Nolan H.; Molitor, David; Reif, Julian

Abstract:
We estimate the causal effects of acute fine particulate matter exposure on mortality, health care use, and medical costs among the US elderly using Medicare data. We instrument for air pollution using changes in local wind direction and develop a new approach that uses machine learning to estimate the life-years lost due to pollution exposure. Finally, we characterize treatment effect heterogeneity using both life expectancy and generic machine learning inference. Both approaches find that mortality effects are concentrated in about 25 percent of the elderly population.

Link: Google Scholar

Key Findings

Mortality Impact of PM 2.5

Each 1 μg/m3 increase in PM 2.5 exposure causes 0.69 additional deaths per million elderly over three days, with effects increasing with age and varying by health status

Healthcare Utilization Effects

PM 2.5 increases cause significant rises in emergency room visits and hospitalizations, with each 1 μg/m3 increase leading to $16,400 more in ER inpatient spending per million beneficiaries

Life-Years Lost Impact

A 1 μg/m3 increase in PM 2.5 causes the loss of 2.99 life-years per million beneficiaries, with effects concentrated among vulnerable populations with lower life expectancy

PM 2.5 Mortality Effects by Age Group

  • Mortality effects increase monotonically with age
  • Largest absolute effect seen in 85+ age group (2.42 deaths per million)
  • Even youngest elderly group (65-69) shows significant effects

Healthcare Utilization Response to PM 2.5

  • ER visits show largest increase at 2.69 additional visits per million
  • ER admissions account for most of increased hospitalizations
  • Non-ER (planned) admissions show no significant change (placebo test)

Life-Years Lost by Life Expectancy Group

  • Greatest per-capita impact on those with 1-2 years life expectancy
  • Substantial effects seen across all vulnerable groups
  • Minimal impact on those with >10 years life expectancy

Contribution and Implications

  • First large-scale causal evidence linking acute PM 2.5 exposure to elderly mortality and healthcare costs
  • Novel machine learning approach provides more accurate estimates of life-years lost than traditional methods
  • Findings suggest nationwide PM 2.5 reductions between 1999-2013 generated annual mortality benefits worth $24 billion

Data Sources

  • Mortality effects by age group visualization based on Table 2, Panel B
  • Healthcare utilization chart constructed using estimates from Table 3, Panel B
  • Life-years lost visualization derived from Table 5, Panel B