When Externalities Collide: Influenza and Pollution
Influenza and air pollution each pose significant public health risks with large global economic consequences. The common pathways through which each harms health presents an interesting case of compounding risk via interacting externalities. Using instrumental variables based on changing wind directions, we show increased levels of contemporaneous pollution significantly increase influenza hospitalizations. We exploit random variations in the effectiveness of the influenza vaccine as an additional instrument to show vaccine protection neutralizes this relationship. This suggests seemingly disparate policy actions of pollution control and vaccination campaigns jointly provide greater returns than those implied by addressing either in isolation.
We thank Max Auffhammer, Luisa Osang, Jeffrey Shaman, and participants at seminars at the University of California Environmental Economics group, UCSD, LSE, Vanderbilt for helpful discussions. G.S. acknowledges support from the Grantham Research Institute on Climate Change and the Environment, at the London School of Economics, and the ESRC Centre for Climate Change Economics and Policy (CCCEP) (ref. ES/R009708/1). All errors are our own. The IRB for access to the HCUP data through the National Bureau of Economic Research (NBER) was approved by the NBER. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Matthew J. Neidell