Environmental and Resource Economics

, Volume 40, Issue 1, pp 37–52 | Cite as

Reconsidering the Impact of the Environment on Long-run Growth when Pollution Influences Health and Agents have a Finite-lifetime

Article

Abstract

Using an overlapping generation model à la Blanchard (1985, J Polit Econ 93:223–247) with human capital accumulation, we demonstrate that the influence of the environment on optimal growth in the long-run may be explained by the detrimental effect of pollution on life expectancy. We also show that, in such a case, greener preferences are growth- and welfare-improving in the long-run even if the ability of the agents to learn is independent of pollution and utility is additively separable. Finally, we establish that a minimum environmental policy is required to obtain a sustainable equilibrium in the market economy and that it is possible to implement a win–win environmental policy.

Keywords

Growth Environment Overlapping generations Human capital Health 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Behrman J, Rosenzweig M (2002) Does increasing women’s schooling raise the schooling of the next generation? Am Econ Rev 92(1):324–334Google Scholar
  2. Bell M, Davis D (2001) Reassessment of the lethal London fog 1952: novel indicators of acute and chronic consequences of acute exposure to air pollution. Environ Health Perspect 109(1):389–394CrossRefGoogle Scholar
  3. Black S, Devereux P, Salvanes K (2003) Why the apple doesn’t fall far: understanding intergenerational transmission of knowledge. NBER Working paper #10066, Cambridge, MAGoogle Scholar
  4. Blanchard O (1985) Debt, deficits and finite horizon. J Polit Econ 93:223–247CrossRefGoogle Scholar
  5. Bloom D, Canning D (2005) Health and economic growth: micro and macro evidence. Working papers 42, CDDRL, Stanford IISGoogle Scholar
  6. Brunekreef B, Holgate ST (2002) Air pollution and health: review. Lancet 360:1233–1242CrossRefGoogle Scholar
  7. Chay K, Greenstone M (2003) The impact of air pollution on infant mortality: evidence from geographic variation in pollution shocks induced by a recession. Quart J Econ 118:1121–1167CrossRefGoogle Scholar
  8. Chen S, Liao C (2005) Health risk assessment on humans exposed to environmental polycyclic aromatic hydrocarbons pollution sources. Sci Total Environ 366:112–123Google Scholar
  9. Chevalier A (2004) Parental education and children’s education: a natural experiment. IZA Discussion Paper #1153, Institute for the Study of Labor, Bonn, GermanyGoogle Scholar
  10. Currais L, Rivera B (1999) Income variation and health: direct impact or reverse causation. Appl Econ Lett 6:761–764CrossRefGoogle Scholar
  11. Currais L, Rivera B (2003) The effect of health investment on growth: a causality analysis. Int Adv Econ Res 9(4):312–324CrossRefGoogle Scholar
  12. Daniels M, Dominici F, Samet J, Zeger S (2000) Estimating particulate matter–mortality, dose–response curves and threshold levels: an analysis of daily time series for the 20 largest US cities. Am J Epidemiol 152:397–406CrossRefGoogle Scholar
  13. DingW, Lehrer F, Rosenquist J, Audrain-McGovern J (2005) The impact of health on academic performance: new evidence using genetic markers. Technical report, University of PennsylvaniaGoogle Scholar
  14. Dominici F, Daniels M, Zeger S, Samet J (2002) Air pollution and mortality: estimating regional and national dose–response relationships. J Am Stat Assoc 97(457):100–135CrossRefGoogle Scholar
  15. Dominici F, Samet J, Zeger S (2000) Combining evidence on air pollution and daily mortality from the 20 largest US cities: a hierarchical modelling strategy. J Roy Stat Soc Ser A 163(3):263–302CrossRefGoogle Scholar
  16. Dominici F, Sheppard L, Clyde M (2003) Health effects of air pollution: a statistical review. Int Stat Rev 71:243–276CrossRefGoogle Scholar
  17. Evans MF, Smith V (2005) Do new health conditions support mortility-air pollution effects. J Environ Econ Manage 50:496–518CrossRefGoogle Scholar
  18. Gradus R, Smulders S (1993) The trade-off between environmental care and long-term growth-pollution in three prototype growth models. J Econ 58(1):25–51Google Scholar
  19. Grossman M, Kaestner R (1997) Effects of education on health. In: Behrman J, Stacey N (eds) The social benefits of education. University of Michigan PressGoogle Scholar
  20. HEI International Scientific Oversight Committee (2004) Health effects of outdoor air pollution in developing countries of Asia: a literature review. Technical report, Special Report 15. Health Effects Institute, Boston, MAGoogle Scholar
  21. Koop G, Tole L (2004) Measuring the health effects of air pollution: To what extent can we really say that people are dying from bad air. J Environ Econ Manage 47(1):30–54CrossRefGoogle Scholar
  22. Kunzli N, Kaiser R, Medina S, Studnicka M, Chanel O, Filliger P, Herry M, Horak F Jr, Puybonnieux-Texier V, Quénel P, Schneider J, Seethaler R, Vergnaud J, Sommer H (2000) Public-health impact of outdoor and traffic-related air pollution: a European assessment. Lancet 356:795–801CrossRefGoogle Scholar
  23. Kurttio P, Pukkala E, Kahelin H, Auvinen A, Pekkanen J (1999) Arsenic concentrations in well water and risk of bladder and kidney cancer in Finland. Environ Health Perspect 107(9):705–710CrossRefGoogle Scholar
  24. López-Casanovas G, Rivera B, CurraisL(2005) Health and economic growth: findings and policy implications. MIT PressGoogle Scholar
  25. Lucas R (1988) On the mechanisms of economic development. J Monet Econ 22:3–42CrossRefGoogle Scholar
  26. Mayer-Foulkes D (2005) Human development traps and economic growth. In: López-Casanovas G, Rivera B, Currais L (eds) Health and economic growth: findings and policy implications. MIT PressGoogle Scholar
  27. Morris R (1995) Environmental health issues. Environ Health Perspect 103(S8):225–231CrossRefGoogle Scholar
  28. Nadal M, Schuhmacher M, Domingo J (2004) Metal pollution of soils and vegetation in an area with petrochemical industry. Sci Total Environ 321:59–69CrossRefGoogle Scholar
  29. Oreopoulos P, Page M, Huff Stevens A (2003) Does human capital transfer from parent to child? The intergenerational effects of compulsory schooling. NBER Working paper #10164, Cambridge, MAGoogle Scholar
  30. Oueslati W (2002) Environmental policy in an endogenous growth model with human capital and endogenous labor supply. Econ Model 19:487–507CrossRefGoogle Scholar
  31. PauluC,Aschengrau A, OzonoffD (1999) Tetrachloroethylene-contaminated drinkingwater in Massachusetts and the risk of colon-rectum, lung, and other cancers. Environ Health Perspect 107(4):265–271CrossRefGoogle Scholar
  32. Plug E (2004) Estimating the effect of mother’s schooling on children’s schooling using a sample of adoptees. Am Econ Rev 94(1):358–368CrossRefGoogle Scholar
  33. Pope C, Burnett R, Thun M, Calle E, Krewski D, Ito K, Thurston G (2002) Lung cancer, cardiopulmonary mortality, and long-term exposure to fine particulate air pollution. J Am Med Assoc 287:1132–1141CrossRefGoogle Scholar
  34. Schuhmacher M, Domingo J (2006) Long-term study of environmental levels of dioxins and furans in the vicinity of a municipal solid waste incinerator. Environ Int 32:397–404CrossRefGoogle Scholar
  35. Valent F, Little D, Bertollini R, Nemer L, Barbone F, Tamburlini G (2004) Burden of disease attributable to selected environmental factors and injury among children and adolescents in Europe. Lancet 363:2032– 2039CrossRefGoogle Scholar
  36. van Ewijk C,Wijnbergen S (1995) Can abatement overcome the conflict between environment and economic growth?. De Economist 143(2):197–216CrossRefGoogle Scholar
  37. Vellinga N (1999) Multiplicative utility and the influence of environmental care on the short-term economic growth rate. Econ Model 16(3):307–330CrossRefGoogle Scholar
  38. Vellinga N, Withagen C (2001) Endogenous growth and environmental policy. Growth Change 32:92–109CrossRefGoogle Scholar
  39. World Health Organization (2002) Reducing risks, promoting healthy life. The World Health Report.Google Scholar

Copyright information

© Springer Science+Business Media B.V. 2007

Authors and Affiliations

  1. 1.Nantes Atlantique Université, Laboratoire d’Économie de Nantes (LEN)Université de NantesNantes Cedex 3France

Personalised recommendations