ARB Research Seminar

This page updated July 26, 2013

The Economic Value of Hospitalizations Associated with Particulate and Ozone Air Pollution

Mark Thayer, Ph.D., San Diego State University; Lauraine G. Chestnut, Stratus Consulting Inc, Colorado; and Stephen Van Den Eeden, Ph.D., Kaiser Permanente Group, California

May 13, 2003
Cal EPA Headquarters, 1001 "I" Street, Sacramento, CA

Research Project


This study estimates the economic benefits of reducing hospitalizations due to respiratory and cardiovascular illness that has been linked to air pollution. The study utilizes detailed information from Kaiser Permanente and other sources, together with a survey of Kaiser Permanente patients who have been recently hospitalized to estimate a comprehensive cost-of-illness, one that includes many non-traditional cost elements related to time and productivity losses, and individual willingness-to-pay to prevent a hospitalization event.

Previous cost-of-illness studies focus exclusively on medical costs and lost earnings while hospitalized, generally ignoring the recovery period. This study specifically accounts for the recovery period and, in addition, supplements the traditional cost categories by adding out-of-pocket costs and activity losses (household production, recreation). The study finds that the hospitalization period is commonly much less than the recovery period. Thus, lost earnings are significantly increased when one accounts for the recovery period. It also finds that the out-of-pocket costs are generally insignificant, in comparison to medical costs and lost earnings. However, the activity losses are quite significant both in terms of time and associated monetary value. The willingness-to-pay estimates indicate that individuals have significant monetary value for prevention of an illness episode that results in hospitalization. There is significant non-linearity in the willingness-to-pay estimates as preventing additional days provide significantly smaller additional value.

Speaker Biography

Mark Thayer received his Ph.D. from the University of New Mexico in Economics and has been professor of economics at San Diego State University for over 20 years. Dr. Thayer has published numerous articles in professional journals and has been principal investigator on environmental projects funded by a variety of government entities. He has extensive experience estimating environmental values and integrating these values into decision making at the state and federal level.

Lauraine G. Chestnut received an M.A. in economics from the University of Colorado at Boulder. She is a Managing Economist with Stratus Consulting Inc in Boulder, Colorado, and has over 20 years research experience regarding the economic valuation of the benefits of pollution control, including effects on human health, visibility aesthetics, agriculture, materials, and other welfare effects. She has designed and implemented numerous stated preference surveys to determine economic value for reducing pollution impacts on visibility, human health, and materials. The United States Environmental Protection Agency, the Air Resources Board, Environment Canada, and others have used results of her work in quantitative assessments of the benefits of pollution control programs.

Stephen Van Den Eeden received his Ph.D. in Epidemiology from the University of Washington School of Public Health. He has worked as an epidemiologist for the Kaiser Foundation Research Institute for the past ten years. Dr. Van Den Eeden also is a lecturer in Epidemiology at both Stanford University and U.C. Berkeley. He has performed many studies examining the association between ambient pollution and cardiovascular and respiratory morbidity and mortality in California. Results from Dr. Van Den Eeden's work help scientists and policy makers understand the relationship between different measures of particulate matter and other ambient pollutants, and their effect on human cardiovascular and respiratory health.

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