There is a nifty new NBER working paper that looks at what happened to asthma in Stockholm after that city instituted a congestion pricing fee. Asthma attacks went down.
We demonstrate that the tax reduced ambient air pollution by 5 to 15 percent, and that this reduction in air pollution was associated with a significant decrease in the rate of acute asthma attacks among young children. The change in health was more gradual than the change in pollution suggesting that it may take time for the full health effects of changes in pollution to be felt….
Reductions in air pollution from traffic by one unit (1 mg/m3) decreased visits for acute asthma to inpatient and outpatient providers by 4 to 15 percent, depending on the length of exposure to reduced pollution. The estimated health effects are comparable with evidence from the epidemiology literature …
I found this paper to be really interesting for three reasons. The first is that this is a clear example of what is called a social determinant of health (SDOH) where health status is driven by non-healthcare factors. Healthcare providers at this point are merely functioning as goalies trying to keep kids out of the hospital while the congestion pricing gets closer to the root cause of the asthma driver — poor air quality. Moving the treatment upstream from the provider officer by reducing pollution saves medical costs while actually raising government revenue instead.
Secondly, this is a pretty cool example of how addressing one externality (congestion time) by putting a price on it addresses a related externality. There might be an argument that the social cost of congestion is higher than the current congestion tax because of the asthma and other related medical costs but solely focusing on congestion, it is also reducing the social cost of respiratory distress.
Finally, I have a personal interest as I’ve mentioned that my son has asthma. I often wonder how much of it was bad luck from his parents and how much of it was living 1.5 miles from the Edgar Thompson steel mill in Braddock and 400 yards from the biggest morning rush hour chokepoint in the Pittsburgh highway system?