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The authors of a new study investigate whether long-term exposure to air pollution worsens human capital, causing dementia. They associate Medicare 15-year dossiers for 6.9 million adults over 65 years of age with EPA’s air quality monitoring network and track the development of individual health, dementia, financial decisions, and cumulative exposure to air pollution by fine dust particles. The authors show that increasing the mean decade exposure by 1 microgram per cubic meter (9.1% of the US mean) increases the probability of dementia diagnosis by 1.3 percentage points (6.7% of the mean). This conclusion is in line with the hypotheses from the medical literature. They conclude that regulating air pollution has greater benefits than has been known so far, partly because dementia has prevented proper financial decisions being made. They estimate that damage associated with dementia by air pollution by EPA exceeds $ 150 billion. The authors also find that the effect of PM2.5 on dementia continues to exceed the current regulatory thresholds.

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