Graduate Student, ACE
"Power Plants, Air Pollution, and Health in Columbia"
The negative effects of air pollution on respiratory and cardiovascular health have been widely documented, but the evidence of the effects on mental health is much more limited. In this paper I provide the first causal estimates of the effects of air pollution on mental health, in addition to respiratory and cardiovascular health, in a developing country. I use the river flows that feed hydroelectric power plants as instruments for electricity generation from fossil fuel plants in Colombia, to estimate its effect on PM10, and the effect of PM10 on health. I find that the electricity necessary to meet the monthly demand for 1,000,000 people (116 GWh), is responsible for 2.75 ug/m3 of PM10. I find that an increase in PM10 of 2.75 ug/m3, increases the rate of mental health patients by 6% and that of respiratory health patients by 9%. From these estimated effects, I estimate that the health costs from 1 ug/m3 of PM10 for the three conditions in the study, are equal to 22 million USD per year for the 24 million people in my sample (half of the population in the country). This translates to a per capita willingness-to-pay of $0.9 USD per year for 1 ug/m3 of PM10, an amount that is 33% lower than what has been estimated for PM10 in China, a country with roughly the same per capita income, but where the ambient levels of PM10 are 124% higher than those in Colombia.
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