Pollution and the Decline in Human Cognition: Evidence from China
69 Pages Posted: 22 Mar 2021
Date Written: February 24, 2021
We use a regression discontinuity design to investigate the long-term causal impact of PM2.5 on cognition ability among middle-aged and older adults in China. We find that the Huai River Policy increased PM2.5 by 22.8 μg/m3 and the long-term PM2.5 exposure has large and significant negative impact on mental intactness, mathematical ability, episodic memory, and overall cognitive ability. The results are robust to a series of robustness checks and economically significant. Our back-of-the-envelope calculations suggest that one-SD increase in PM2.5 is linked to an annual economic loss of $23.9 billion due to increased medical expenditures treating mental illness, and reducing PM2.5 to the WHO standard would save roughly $34.7 billion annually.
Keywords: Long-term exposure, Fine particulate matter, Cognitive ability, Regression discontinuity design, Huai River Policy
JEL Classification: I18, Q48, Q53
Suggested Citation: Suggested Citation