IOM: The Economics of Better Environmental Health

Over the past two decades, epidemiological studies have strengthened the link between air pollution and specific respiratory ailments, yielding better valuations for the pollution-related costs of illness and thus pinpointing the benefits of environmental regulations. Much work remains to be done, however, in linking air pollution to other important health outcomes, such as cancer, infant mortality, and even doctor visits. Nagging questions also remain about how best to translate health effects into economic values. These were some of the questions addressed at the 14 November 2006 Roundtable on Environmental Health Sciences, Research, and Medicine. a project of the National Academies' Institute of Medicine cosponsored by the NIEHS along with several other public and private entities. Economists and public health analysts outlined developing methodolo-gies to identify and quantify the health benefits of reduced air pollution and to pinpoint costs to industry of complying with air quality regulations. " Overall, estimating risk from air pollution is becoming more precise as the pathway from air pollution to health is better characterized, " said C. at the roundtable. Monitoring large groups of people for long periods has enabled researchers to better control for confounding factors such as age, sex, and cigarette smoking, said Pope. More inter-disciplinary work is needed to expand the scope of health benefits that can result from reduced pollution as well as further pinpoint measurable compliance costs of regulation. Health benefits are integrated into regulatory decision making at the end of a complex modeling structure that begins with simulations of air emissions reductions likely to result from a particular regulatory strategy. Other models determine likely changes in human exposure to pollution and probable improvements to public health resulting from the strategy. Improvements to public health—reduc-tions in incidences of disease or mortali-ty—are assigned monetary values so that benefits of regulation can be measured against the costs of implementing and complying with them. Monetization is controversial largely because of the need to place a value on premature death, and the sheer logistics of the task—simply calculating the number of doctors' visits for respiratory ailments, for example—can be daunting. Health benefits are calculated either by estimating direct costs associated with avoided illnesses or by assessing the public's willingness to pay for avoided illnesses. " Cost of illness " calculations are generally based on hospital admissions and work days lost, which capture direct dollar savings—health care costs avoided by better air quality—but ignore the price …