Air pollution and innovation

Felix Bracht and Dennis Verhoeven

Journal of Environmental Economics and Management, 2025, vol. 130, issue C

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)
Date: 2025
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Related works:
Working Paper: Air pollution and innovation (2025)
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:eee:jeeman:v:130:y:2025:i:c:s0095069624001761

DOI: 10.1016/j.jeem.2024.103102

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