This report assesses the evidence that exists for the ways in which local air quality could influence local economic growth through health and workforce issues, quality-of-life issues, or air-quality regulations and business operations. It then extrapolates some of the existing results to the Pittsburgh region.

Links Between Air Quality and Economic Growth

Implications for Pittsburgh

Shanthi Nataraj, Ramya Chari, Amy Richardson, Henry H. Willis

ResearchPublished Dec 20, 2013

Cover: Links Between Air Quality and Economic Growth
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The Pittsburgh region has seen improvements in its air quality during the past several decades. However, it remains out of compliance with the National Ambient Air Quality Standards (NAAQS) set by the U.S. Environmental Protection Agency, notably for ozone and particulate matter. This report asks what evidence exists for the ways in which local air quality could influence local economic growth through health and workforce issues, quality-of-life issues, or air-quality regulations and business operations and how those effects might be relevant to the Pittsburgh region. It assesses the evidence for each effect based on a review of the existing literature then extrapolates some of the existing results to the Pittsburgh region.

The authors find that meeting the NAAQS for ozone and particulate matter would be associated with improved health outcomes valued at approximately $128 million and $488 million, respectively. Although regulated industries do face costs associated with improving air quality, meeting the NAAQS can make it easier for businesses in regulated industries to locate and operate in the Pittsburgh region in the long run. By extrapolating estimates from national studies to the Pittsburgh region, the authors estimate that being in attainment with the NAAQS for ozone would be associated with approximately eight more establishments in regulated industries in the Pittsburgh region. Meanwhile, being in attainment with the NAAQS for ozone and particulate matter would be associated with approximately 1,900 and 400 more jobs and with $229 million and $57 million more output, respectively, from regulated industries in the Pittsburgh region.

Key Takeaways

Meeting the National Ambient Air Quality Standards for Ozone and Particulate Matter Would Be Associated with Improved Health Outcomes in the Pittsburgh Region

  • Meeting the National Ambient Air Quality Standards for ozone and particulate matter would be associated with improved health outcomes valued at approximately $128 million and $488 million, respectively, in the Pittsburgh region.

Although Regulated Industries Do Face Costs Associated with Improving Air Quality, Meeting the National Ambient Air Quality Standards Can Make It Easier for Businesses in Regulated Industries to Locate and Operate in the Pittsburgh Region in the Long Run

  • Being in attainment with the National Ambient Air Quality Standards for ozone would be associated with approximately eight more establishments in regulated industries in the Pittsburgh region.
  • Being in attainment with the National Ambient Air Quality Standards for ozone and particulate matter would be associated with approximately 1,900 and 400 more jobs and with $229 million and $57 million more output, respectively, from regulated industries in the Pittsburgh region.

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Nataraj, Shanthi, Ramya Chari, Amy Richardson, and Henry H. Willis, Links Between Air Quality and Economic Growth: Implications for Pittsburgh. Santa Monica, CA: RAND Corporation, 2013. https://www.rand.org/pubs/research_reports/RR260.html.
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The research described in this report was sponsored by the Heinz Endowments and conducted in the Environment, Energy, and Economic Development Program within RAND Justice, Infrastructure, and Environment.

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