Vog: Using Volcanic Eruptions to Estimate the Health Costs of Particulates and SO2 by Timothy Halliday, John Lynham and Áureo de Paula Working Paper No. 2015-2 April 2, 2015 UNIVERSITY OF HAWAI‘I AT MANOA 2424 MAILE WAY, ROOM 540 • HONOLULU, HAWAI‘I 96822 WWW.UHERO.HAWAII.EDU WORKING PAPERS ARE PRELIMINARY MATERIALS CIRCULATED TO STIMULATE DISCUSSION AND CRITICAL COMMENT. THE VIEWS EXPRESSED ARE THOSE OF THE INDIVIDUAL AUTHORS. Vog: Using Volcanic Eruptions to Estimate the Health Costs of Particulates and SO2∗ Timothy J. Halliday† John Lynham UH - M¯anoa and IZA UH - M¯anoa Áureo de Paula UCL, São Paulo School of Economics, IFS, CeMMAP April 2, 2015 Abstract K¯ılauea volcano is the largest stationary source of SO2 pollutioninthe United States of America. Moreover, the SO2 that the volcano emits eventu- ally forms particulate matter, another major pollutant. We use this exogenous ∗We thank Jill Miyamura of Hawai‘i Health Information Corporation for the data. Chaning Jang and Jonathan Sweeney provided expert research assistance. We also thank participants at the University of Hawai Applied Micro Group for useful comments. †Corresponding Author. Address: 2424 Maile Way; 533 Saunders Hall; Honolulu, HI 96822. Tele: (808) 956 -8615. E-mail:
[email protected]. 1 source of pollution variation to estimate the impact of particulate matter and SO2 on emergency room admissions and costs in the state of Hawai‘i. Impor- tantly, our data on costs is more accurate than the measures used in much of the literature. We find strong evidence that particulate pollution increases pulmonary-related hospitalization. Specifically, a one standard deviation in- crease in particulate pollution leads to a 2-3% increase in expenditures on emergency room visits for pulmonary-related outcomes.