Hazed and Confused: The Effects of Air Pollution on Cognitive Functioning and Financial Decision Making among the Elderly
Presented by:
Nicolas Kuminoff
Department of Economics
Arizona State University
Friday, November 18, 2016
12:00 pm-1:30 pm
Taylor-Hibbard Seminar Room (Rm103)
Dementia is one of the most terrifying and expensive shocks to human health. In its most common form—Alzheimer’s disease—patients experience a progressive decline of their cognitive and functional skills. A growing medical literature links dementia to air pollution. Our study provides the first national analysis of how long term exposure to air pollution affects cognitive functioning and decision making among the elderly. We link administrative records from the U.S. Centers for Medicare and Medicare Services to data on spatial sorting in the housing market. We develop a quasi-experimental retrospective cohort study that allows us to estimate how long term air pollution exposure affects a variety of financial and health outcomes including (1) the probability of being diagnosed with dementia, (2) health care expenditures, (3) the amount of money left on the table when choosing a health insurance plan, and (4) the probability of violating axioms of consumer preference theory when choosing a health insurance plan. Preliminary results suggest that long term air pollution exposure negatively affects all of these outcomes. For example, we find that a 10 microgram per cubic meter increase in 10-year annual average exposure to fine particles (pm2.5) increases the probability of being diagnosed with dementia by one to two percentage points.