Transboundary Pollution in Southeast Asia: Welfare and Avoidance Costs in Singapore from the Forest Burning in Indonesia

Tamara Sheldon and Chandini Sankaran

No 960, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: Forest burning in Indonesia results in severe episodes of “seasonal haze” in neighboring Singapore. We offer the first causal analysis of the transboundary health effects of the Indonesian forest burning. Using a two-stage approach and instrumenting for air pollution with satellite fire data, we estimate the impacts of the Indonesian fires on Singaporean polyclinic attendances for acute upper respiratory tract infections and acute conjunctivitis. We also estimate the change in electricity demand in Singapore attributable to the fires, finding that demand increases as people respond to haze episodes by staying indoors. We estimate partial health and avoidance costs of US$333 million from January 2010 to June 2016. Our estimates suggest avoidance behavior is significant, accounting for over three quarters of our estimate.

Keywords: air pollution; health; avoidance behavior; externalities; forestry (search for similar items in EconPapers)
JEL-codes: D62 I1 Q23 Q51 Q53 (search for similar items in EconPapers)
Date: 2016-12-05
New Economics Papers: this item is included in nep-agr, nep-env, nep-hea and nep-sea
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