Air pollution and innovation

Felix Bracht and Dennis Verhoeven

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: If air pollution harms innovation — and therefore future productivity — existing assessments of its economic cost are incomplete. We estimate the effect of fine particulate matter concentration on inventive output in 977 European regions. Exploiting thermal inversions and weather-induced ventilation of pollutants for identification, we find that a decrease in air pollution equivalent to the average yearly drop in Europe leads to 1.2% more patented inventions in a given region. A back-of-the-envelope calculation suggests that accounting for the effect on innovation increases the economic cost of air pollution as assessed in prior work by about three quarters.

Keywords: air pollution; air quality; innovation; productivity (search for similar items in EconPapers)
JEL-codes: O13 O30 Q53 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2025-03-31
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur, nep-ino and nep-res
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Published in Journal of Environmental Economics and Management, 31, March, 2025, 130. ISSN: 0095-0696

Downloads: (external link)
http://eprints.lse.ac.uk/126875/ Open access version. (application/pdf)

Related works:
Working Paper: Air pollution and innovation (2021)
Working Paper: Air pollution and innovation (2021)
Working Paper: Air Pollution and Innovation (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:126875

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