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Air pollution and innovation

Bracht, Felix and Verhoeven, Dennis (2021) Air pollution and innovation. CEP Discussion Papers (1817). Centre for Economic Performance, LSE, London, UK.

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Abstract

Existing estimates of the economic costs of air pollution do not account for its effect on inventive output. Using two weather phenomena as instruments, we estimate this effect in a sample of 1,288 European regions. A decrease in exposure to small particulate matter of 0.17µg/m3 - the average yearly reduction in Europe - leads to 1.7% more patented inventions. After ruling out reallocation of human capital, inventor mortality and R&D expenditures as drivers of the effect, we conclude that air pollution's harm to economic output increases by at least 10% when accounting for innovation.

Item Type: Monograph (Discussion Paper)
Official URL: https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information: © 2021 The Authors
Divisions: Centre for Economic Performance
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences
H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
JEL classification: O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O30 - General
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q53 - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Date Deposited: 24 Feb 2022 15:00
Last Modified: 25 Feb 2022 00:03
URI: http://eprints.lse.ac.uk/id/eprint/113818

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