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Particulate pollution and the productivity of pear packers

Environmental Health Economic Analysis Annotated Bibliography

Details

Research article Cost-benefit analysis (CBA)
Authors
Chang T, Graff Zivin J, Gross T and Neidell M
Journal
American Economic Journal: Economic Policy
Summary
This analysis examined the effect of outdoor air pollution on the productivity of indoor workers at a pear-packing factory in Northern California. A 10-unit increase in PM2.5 reduced worker productivity by approximately 6 percent; these effects occurred at PM levels below national air quality standards. In a nationwide extrapolation, reductions in PM2.5 between 1999 and 2008 generated $19.5 billion in labor cost savings. Findings suggest that outdoor pollution affects the labor productivity of indoor workers, and may be an important determinant of economic growth.
Population
Employees in a pear-packing facility

Health Outcomes

  • Not available

Environmental Agents

List of Environmental Agents:

  • Air pollutants (particulate matter (PM2.5/fine and PM10/coarse), ozone (O3), carbon monoxide(CO), nitrogen dioxide (NO2))

Source of Environmental Agents: (Not available)

Economic Evaluation / Methods and Source

Type:

  • Cost-benefit analysis (CBA)

Cost Measured:

  • Reduced earnings due to presenteeism (reduced on-the-job productivity)

Potential Cost Measures:

  • Changes in labor supply due to air pollution related sickness (e.g., missed work days, shortened work hours)

Benefits Measures:

  • Labor productivity benefits
  • total welfare benefits (captured by capitalization into housing prices)

Potential Benefits: (Not available)

Location:

  • Northern California

Models Used: (Not available)

Methods Used:

  • The authors estimated the effects of fine particulate matter (PM2.5) on worker productivity in a pear-packing facility. The authors — 1) estimated hourly productivity using a hybrid production function which accounted for variable and fixed effects; 2) applied estimated effects to calculate productivity in the manufacturing sector at a national level from changes in PM2.5 across the U.S. from 1999-2008; and 3) quantified total welfare benefits associated with this pollution reduction by using the hedonic price method to study the effect of PM2.5 on housing values.

Sources Used:

  • Worker productivity data from payroll records provided by the pear-packing facility for the 2001, 2002, and part of the 2003 packing seasons; weather and pollution data from monitors maintained by the California Air Resources Board; county-level manufacturing earnings data from Bureau of Labor Statistics (2000); additional sources cited in publication

Economic Evaluation / Methods and Source

Citation:

  • Chang T, Graff Zivin J, Gross T and Neidell M. 2016. Particulate pollution and the productivity of pear packers. American Economic Journal: Economic Policy.

Pubmed:

DOI:

NIEHS Funding:

  • 1R21ES019670-01

Other Funding:

  • The George and Obie Shultz Fund