Essays on Economics of Indoor and Outdoor Air Pollution in India

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Essays on Economics of Indoor and Outdoor Air Pollution in India

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Title: Essays on Economics of Indoor and Outdoor Air Pollution in India
Author: Kishore, Avinash
Citation: Kishore, Avinash. 2012. Essays on Economics of Indoor and Outdoor Air Pollution in India. Doctoral dissertation, Harvard University.
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Abstract: Air pollution—both indoor and outdoor—results in more deaths and diseases in India than in any other country in the world. The first chapter in this dissertation explores why despite profoundly negative health consequences of indoor air pollution, most rural Indian households cook using traditional biomass fuel. Among many factors that contribute to households’ continued use of solid fuels, we focus on one: women’s intra-household status. We exploit Indian son preference: having a girl first child lowers women’s status relative to having a boy first child, and is therefore associated with lower likelihood of using clean fuel. This effect is found throughout the wealth distribution, and is not concentrated among households in states with a high child sex ratio or households where women have some education. The second chapter focuses on outdoor air pollution in India. We use a general equilibrium model of Indian economy to quantify the spillovers from a carbon tax on fossil fuels to local air quality and the health outcomes in urban India. We estimate that a $10/ton of Carbon tax on all fossil fuels will reduce CO2 emission by 10.7% from business-as-usual and save nearly 0.3 million urban lives from pollution related deaths while adding 0.2 percent to the GDP over the three decades from 2003 to 2030. We get this double dividend from carbon tax if the tax revenue is used to reduce existing distortionary taxes. Carbon tax is more progressive if the revenue is repatriated to households, but the GDP is slightly smaller than the base case under this regime. In the third chapter, we present the first VSL estimates from India using hedonic wage method with worker and job characteristics data from Employment and Unemployment Survey of India (EUS)—a large nationally representative survey that has not been used in this literature before. We estimate VSL of an average low-skilled urban Indian worker to be about $85,000 in 2004-05 (about 65 times the annual wage) at 2010 constant prices. Our estimates of VSL and VSL-to-income ratio are much lower than all previous estimates from India. Comparisons with estimates from other developing countries like China and Taiwan, however, suggest that our estimates are more reasonable. Our VSL estimate, if reliable, sets a lower threshold for investment in environment and public safety projects that can be justified using cost-benefit criteria.
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