ABSTRACT
Gasoline combustion causes local air pollution, notably smog and carbon monoxide. This pollution can reduce visibility, but its main harm is to human health. For example, poor air quality can exacerbate respiratory problems and lead to premature mortality. Economists have assessed the damages caused by air pollution using epidemiological evidence on the link between air quality and human health, and studies estimating people’s willingness to pay to reduce risks of adverse health effects. Damage estimates have fallen over the last 20 years or so as the vehicle fleet has become cleaner, at least partly in response to emissions-per-mile regulations that are imposed on new vehicles. According to a recent study by Kenneth Small and Camilla Kazimi (University of California-Irvine), pollution damages are around 2¢ per mile (after updating to 2000), or about 40¢ per gallon, though there is still much uncertainty over these estimates.
