Human Health and Economic Impacts of Ozone Reductions by Income Group

Low-income households may be disproportionately affected by ozone pollution and ozone policy. We quantify how three factors affect the relative benefits of ozone policies with household income: (1) unequal ozone reductions; (2) policy delay; and (3) economic valuation methods. We model ozone concentrations under baseline and policy conditions across the full continental United States to estimate the distribution of ozone-related health impacts across nine income groups. We enhance an economic model to include these impacts across household income categories, and present its first application to evaluate the benefits of ozone reductions for low-income households. We find that mortality incidence rates decrease with increasing income. Modeled ozone levels yield a median of 11 deaths per 100 000 people in 2005. Proposed policy reduces these rates by 13%. Ozone reductions are highest among low-income households, which increases their relative welfare gains by up to 4% and decreases them for the rich by up to 8%. The median value of reductions in 2015 is either $30 billion (in 2006 U.S. dollars) or $1 billion if reduced mortality risks are valued with willingness-to-pay or as income from increased life expectancy. Ozone reductions were relatively twice as beneficial for the lowest- compared to the highest-income households. The valuation approach affected benefits more than a policy delay or differential ozone reductions with income.