Economic impacts of urban air pollution: valuation for Mumbai, India

Urban air pollution is on the rise in many cities of the world. There are associated health impacts that affect urban residents, especially the poor. By doing economic valuation, it is possible to draw the attention of citizens, policy-makers and, of course, researchers to the extent of damage and the value of it. In this paper, such a valuation is done using time-series data for the suburb of Mumbai called Chembur and cross-sectional data for several wards. We value mortality and morbidity from air pollution using the above data. It is shown that the pollution in Mumbai can lead to high health costs. In general the average cost amounts 0.26% of income due to highly subsidized treatment and poverty. However, 5% of patients who suffer severe attacks may pay as much as much as 19% of their income. Workdays lost are of equal importance to health expenditures. Distributional aspects of the damage are such that children and senior citizens are affected most.