How Should the World Bank Estimate Air Pollution Damages?

Resources for the Future Discussion Paper 14-30

37 Pages Posted: 14 Dec 2014

See all articles by Maureen Cropper

Maureen Cropper

University of Maryland - Department of Economics; Resources for the Future

Shefali Khanna

Harvard University, Faculty of Arts and Sciences, Students

Date Written: September 15, 2014

Abstract

We evaluate the approach currently used by the World Bank to measure exposure to outdoor air pollution and associated economic costs, as reported in the World Development Indicators database. We recommend that current exposure estimates, based on an econometric model, be replaced by estimates used in computing the Global Burden of Disease (GBD). The GBD combines satellite data with chemical transport models to provide global estimates of fine particle exposure. We recommend that the World Bank also use estimates of disability-adjusted life years (DALYs) lost due to outdoor air pollution produced by the GBD. DALYs should continue to be monetized using the value of a statistical life year, which is currently transferred from a US value of a statistical life (VSL) using an income elasticity of one. Going forward, it would be desirable to allow the income elasticity of the VSL to vary with income and to revisit the choice of baseline VSL.

Keywords: air pollution exposure, valuing DALYs, Global Burden of Disease

JEL Classification: Q51, Q53, Q56

Suggested Citation

Cropper, Maureen L. and Khanna, Shefali, How Should the World Bank Estimate Air Pollution Damages? (September 15, 2014). Resources for the Future Discussion Paper 14-30, Available at SSRN: https://ssrn.com/abstract=2537875 or http://dx.doi.org/10.2139/ssrn.2537875

Maureen L. Cropper (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States

Shefali Khanna

Harvard University, Faculty of Arts and Sciences, Students ( email )

Cambridge, MA
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
92
Abstract Views
858
rank
398,281
PlumX Metrics