IZA DP No. 9398: Vog: Using Volcanic Eruptions to Estimate the Health Costs of Particulates
The high correlation of industrial pollutant emissions complicates the estimation of the impact of industrial pollutants on health. To circumvent this, we use emissions from Kīlauea volcano, uncorrelated with other pollution sources, to estimate the impact of pollutants on local emergency room admissions and a precise measure of costs. A one standard deviation increase in particulates leads to a 20-30% increase in expenditures on ER visits for pulmonary outcomes mostly among the very young. No strong effects for SO2 pollution or cardiovascular outcomes are found. Since 2008, the volcano has increased healthcare costs in Hawai'i by an estimated $60 million.