We posit that pollution affects welfare outcomes directly, through a person’s health, and indirectly, through the health of her children. This paper is the first to consider the indirect channel to welfare losses from pollution. We analyze the effect of ozone on subjective health and life satisfaction using a panel of German individuals matched with highly granular pollution data. We find that individuals with children in their households suffer losses in life satisfaction due to ozone, while those without children do not. Ozone does not affect the health satisfaction of either group. We provide evidence on the mechanism of the life satisfaction effect by showing that ozone leads to losses in workdays to care for a sick child.
- Submission Status: Submitted.
- 2018 Essen-Duisburg conference on health economics; Essen, Ger
- 2018 LACEA-LAMES conference; Guayaquil, Ecu.
- 2019 EARE; Manchester, U.K.