International Spillover Effects of Air Pollution: Evidence from Mortality and Health Data

Abstract International transboundary air pollution poses a significant threat to the global economy and health, yet conventional economic analyses seldom incorporate this phenomenon. By integrating transboundary particle trajectory data with individual-level mortality and emergency department visit records, we find that air pollution from China significantly increases mortality and morbidity in South Korea. We evaluate the spillover benefits of recent Chinese environmental regulations and find that a country's environmental policies could generate substantial hidden benefits for neighboring countries. Finally, we demonstrate that China's potentially strategic reductions in pollution could have undermined these benefits, highlighting the implications for additional gains through Coasian bargaining.