Up in Smoke: The Impact of Wildfire Pollution on Healthcare Municipal Finance

Luis López, Dermot Murphy (), Nitzan Tzur-Ilan and Sean Wilkoff ()
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Dermot Murphy: https://business.uic.edu/profiles/murphy-dermot/
Sean Wilkoff: https://www.unr.edu/business/faculty-and-staff/wilkoff-sean

No 2503, Working Papers from Federal Reserve Bank of Dallas

Abstract: Wildfire smoke pollution is associated with significantly higher healthcare municipal borrowing costs, amounting to $250 million in realized interest costs for high-smoke counties in 2010–2019, and an estimated $570 million over the following 10 years. These costs are disproportionately higher in high-poverty or high-minority areas where there is more smoke-related uncompensated care. Out-of-state smoke is also associated with higher borrowing costs, suggesting poor wildfire management imposes externalities on nearby states. Our hospital-level analysis shows increases in asthma cases and unprofitable emergency room visits, tighter financial constraints and reduced investment. Migration sorting exacerbates these effects by concentrating vulnerable households in high-smoke counties.

Keywords: municipal bonds; wildfires; smoke; air pollution; climate finance; externalities (search for similar items in EconPapers)
JEL-codes: N32 O18 R31 (search for similar items in EconPapers)
Pages: 59
Date: 2025-01-09
New Economics Papers: this item is included in nep-env, nep-hea and nep-ure
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DOI: 10.24149/wp2503

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