THE HIGH HEALTHCARE COSTS OF POLLUTION: Evidence from a volcano in Hawaii

Sulphur dioxide pollution from a Hawaiian volcano has caused over $6 million of healthcare costs since 2008, according to research by Timothy Halliday, John Lynham and Aureo de Paula, to be presented at the Royal Economic Society''s annual conference in Brighton in March 2016.

Kīlauea volcano emits more sulphur dioxide than any other stationary source in the United States. By comparing Hawaiian records on air quality with emergency room records, the study finds that rising sulphur dioxide emissions lead to higher rates of lung (pulmonary) conditions, especially for the very young.

Importantly, studying a volcano means that only the effects of sulphur dioxide are seen, instead of sulphur dioxide and carbon monoxide or other pollutants. In addition, it focuses on where patients lived, instead of where they were admitted to hospital, meaning that the long-term effects are more obvious. The authors comment:

''Our research provides one of the best available estimates of the pure impact of particulate pollution on human health.''


Kīlauea volcano is the largest stationary source of sulphur dioxide pollution in the United States. The sulphur dioxide that the volcano emits eventually forms particulate matter, another major pollutant. This research uses this exogenous source of pollution variation to estimate the impact of particulate matter and sulphur dioxide on emergency room admissions and costs in the state of Hawaii.

To accomplish this, the researchers employ two sources of data. The first is measurements of air quality collected by the Hawaii Department of Health taken from various monitoring stations across the state. The second is data on emergency room use due to cardio-pulmonary reasons, obtained from the Hawaii Health Information Corporation. An important feature of the study is that the cost data are more accurate than the cost measures used in much of the previous research literature.

The researchers merged these data by region and day to obtain a comprehensive database of air quality and medical care use in the state of Hawaii. Importantly, they employed coarse geographic information on the patient''s residence (as opposed to the hospital in which they were admitted) when computing the use time series by region to ensure that the use measures corresponded more accurately with the pollution exposure.

Using the merged database, the researchers then employed regression techniques in which they related emergency room use and charges to measures of exposure to particulates and sulphur dioxide while controlling for comprehensive seasonal patterns and regional effects.

The study finds strong evidence that particulate pollution increases pulmonary-related hospitalisation. Specifically, a one standard deviation increase in particulate pollution leads to a 2-3% increase in expenditures on emergency room visits for pulmonary-related outcomes.

But the study does not find strong effects for pure sulphur dioxide pollution or for cardiovascular outcomes. It also finds no effect of volcanic pollution on fractures, the placebo outcome.

Finally, the effects of particulate pollution on pulmonary-related admissions are most concentrated among the very young. The estimates suggest that since the large increase in emissions that began in 2008, the volcano has increased healthcare costs in Hawaii by approximately $6,277,204.

These estimates provide evidence of some of the external costs of particulate pollution. Importantly, other studies have had a difficult time unravelling the effects of particulate pollution from other types of pollution such as carbon monoxide because they tend to be highly correlated.

In contrast, in the data in the new study, the correlation between particulate pollution and other pollutants (aside from sulphur dioxide, of course) is considerably smaller than the other literature on the topic, which largely relies on man-made sources of pollution. In this sense, the researchers provide one of the best available estimates of the pure impact of particulate pollution on human health.

Using Vog from Kilauea to Estimate the Health Consequences of Particulate and SO2 Pollution – Timothy J Halliday, John Lynham, Aureo de Paula