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Vog: Using Volcanic Eruptions to Estimate the Health Costs of Particulates and SO2

Kılauea volcano is the largest stationary source of SO2 pollution in the United States of America. Moreover, the SO2 that the volcano emits eventually forms particulate matter, another major pollutant. We use this exogenous source of pollution variation to estimate the impact of particulate matter and SO2 on emergency room admissions and costs in the state of Hawai‘i. Importantly, our data on costs is more accurate than the measures used in much of the literature. We find strong evidence that particulate pollution increases pulmonary-related hospitalization. Specifically, a one standard deviation increase in particulate pollution leads to a 2-3% increase in expenditures on emergency room visits for pulmonary-related outcomes. However, we do not find strong effects for pure SO2 pollution or for cardiovascular outcomes. We also find no effect of volcanic pollution on fractures, our placebo outcome. Finally, the effects of particulate pollution on pulmonary-related admissions are most concentrated among the very young. Our estimates suggest that, since the large increase in emissions that began in 2008, the volcano has increased healthcare costs in Hawai‘i by approximately $6,277,204.

Revised: Posted February 16, 2017

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