Exploration of the regional impacts of atmospheric conditions below the top of the pyramid: the case of the Seacoast Area in New England

Much of the focus of the economic impact of air quality has been on the most severe impacts of poor air quality on human health and economic output, including the health care costs and economic consequences of deaths, hospitalizations and lost workdays. Much less is understood about common and broader economic impact of atmospheric conditions on the regular day-to-day activities of individuals and worker productivity. Here the impact could be relatively minor for individuals and individual businesses but quite significant for the economy overall, as particularly in heavily populated urban areas it impacts large numbers of people at their workplaces.

Our research and paper is exploratory, its focus is on worker productivity in the New England region during the summer months when poor air quality can impact large numbers of citizens. Findings from New England can be highly relevant for other regions and areas, particularly urban areas in the Pacific Rim with greater numbers of poor air quality days annually than New England. The research considers the impact of air quality at indoor workplaces. The purpose is to improve our understanding of air quality economic impacts, particularly how it impacts private firms and workers in subtle but important ways, and help to increase general awareness regarding air quality. Another objective is to consider the potential economic value of air quality information and forecasts, how forecasts can be used to reduce loss in productivity from poor air quality.

The inquiry is unique in that it measures and assesses the impact of poor air quality at a scale not recorded by statistical agencies or hospitals. The adverse affects of poor air quality are not captured at workplaces and in a systematic way unless the effects are severe or catastrophic to warrant hospitalization or emergency room visit or result in lost days at work. The inquiry uses survey data of employees to capture how poor air quality, through its affect on respiratory symptoms, such as chest discomfort, coughing, wheezing, flu, and itchy/watery eyes, can lead to reduced productivity at the workplace. Treatment is not typically sought for these symptoms; as a result it is necessary to have an alternative research method to measure the impact of poor air quality. Two general web-based surveys were used to examine the relationship between poor air quality and worker general health and productivity. A broad cross-section of workers participated in the survey, over 400 workers at large employers in New England. An initial survey provided relevant demographic information and the prevailing health conditions of the survey population and a weekly survey during the summer of 2004 was used to consider the health and behavioral effects of changes in air quality. The workplaces were typical in that they were indoors where the effects of air quality have been assumed to be relatively low compared to its effect on outdoor workers. However, individuals who work indoors have to be outdoors to walk and commute to work and their exposure to poor air quality can affect their productivity at their indoor workplace. However, individuals who work indoors have to be outdoors to walk and commute to work and their exposure to poor air quality can continue at the indoor workplace and affect their productivity.

The findings are significant. Peaks in the daily maximum eight-hour ozone were strongly correlated with peaks in the number of respondents who reported feeling less productive than usual. Increases in the number of respondents who reported feeling less productive as the day went on also correlated with ozone concentration.

Using an economic impact model and considering how air quality forecasts could be used to avoid some of the loss of worker productivity from poor air quality (through adjusting work schedules and allowing for work at home) the net annual benefit to the region in avoided loss in short-term productivity in a typical year (with 10 poor air quality days a year) is estimated at about $50 million. This is the estimated annual value of air quality forecasts in New England. In areas with many more poor air quality days in a typical year and greater concentrations of workers, such as many urban areas in the Pacific Rim, the annual benefits of air quality forecasts could be significantly higher. A simple calculation, with New England representing approximately 5 percent of total employment in the US, estimates the value of air quality forecasts in the United States would be just under $1 billion. Private firms should be willing to pay this amount for air quality forecasts. The estimates of economic benefits from air quality forecasts are only for short-term annual improvements in worker productivity. They do not take into account short- and long-term benefits to private firms and their employees from avoiding medical costs and lost days at work.