Air pollution is a major threat to human health. Vehicle exhaust fumes are particularly harmful as they are emitted close to the ground. To reduce emissions from inner-city traffic, Germany has implemented Low Emission Zones (LEZ). These are signposted areas in cities where high-emitting vehicles, as indicated by a windshield sticker, are banned from entering. The health impact of this policy, however, remains controversial because it is methodologically difficult to prove that improved population health can be causally attributed to LEZs.
A new paper by IZA researchers Nico Pestel and Florian Wozny uses panel data from German hospitals from 2006 to 2016 with precise information on the location and catchment areas of hospitals, as well as the annual frequency of diagnoses. The analysis exploits the variation in timing and geographic coverage of LEZs, which have been rolled out across cities since 2007. Air quality data comes from air pollution monitors, which are assigned to LEZs.
Fewer air pollution-related diagnoses
The findings indicate that LEZs substantially improve air quality. Concentrations of particulate matter (PM10) and nitrogen dioxide (NO2) are significantly reduced. Importantly, these improvements translate into fewer air pollution-related diagnoses, especially diseases of the circulatory and the respiratory system, among hospitals whose catchment areas are covered more by an LEZ.
The authors provide some evidence that these results appear to be driven by reductions in non-emergency diagnoses of chronic diseases, not so much by emergency cases. Given the large literature showing that air pollution has negative consequences for labor supply and productivity on the job, the direct health effects of LEZs may be complemented by indirect benefits for human capital and economic growth.