Economic evaluation of the benefits of reducing acute cardiorespiratory morbidity associated with air pollution
© Stieb et al; licensee BioMed Central Ltd. 2002
Received: 11 September 2002
Accepted: 18 December 2002
Published: 18 December 2002
Few assessments of the costs and benefits of reducing acute cardiorespiratory morbidity related to air pollution have employed a comprehensive, explicit approach to capturing the full societal value of reduced morbidity.
We used empirical data on the duration and severity of episodes of cardiorespiratory disease as inputs to complementary models of cost of treatment, lost productivity, and willingness to pay to avoid acute cardiorespiratory morbidity outcomes linked to air pollution in epidemiological studies. A Monte Carlo estimation procedure was utilized to propagate uncertainty in key inputs and model parameters.
Valuation estimates ranged from $13 (1997, Canadian) (95% confidence interval, $0–28) for avoidance of an acute respiratory symptom day to $5,200 ($4,000–$6,400) for avoidance of a cardiac hospital admission. Cost of treatment accounted for the majority of the overall value of cardiac and respiratory hospital admissions as well as cardiac emergency department visits, while lost productivity generally represented a small proportion of overall value. Valuation estimates for days of restricted activity, asthma symptoms and acute respiratory symptoms were sensitive to alternative assumptions about level of activity restriction. As an example of the application of these values, we estimated that the observed decrease in particulate sulfate concentrations in Toronto between 1984 and 1999 resulted in annual benefits of $1.4 million (95% confidence interval $0.91–1.8 million) in relation to reduced emergency department visits and hospital admissions for cardiorespiratory disease.
Our approach to estimating the value of avoiding a range of acute morbidity effects of air pollution addresses a number of limitations of the current literature, and is applicable to future assessments of the benefits of improving air quality.
Numerous assessments have been conducted around the world of the costs and/or benefits of interventions to improve air quality [1–7]. Benefits assessments typically employ the damage function approach, consisting of estimating changes in air pollution emissions and resultant changes in ambient air quality; calculating the number of avoided adverse health and environmental outcomes using concentration-response functions; and applying economic value measures to avoided outcomes , often extrapolating valuation estimates from the original context in which data were collected . The majority of benefits generally derive from improved human health, including both reduced mortality and morbidity. Benefits of reduced mortality and chronic morbidity tend to dominate these assessments, accounting for over 90 percent of benefits in most instances [1, 7]. Nonetheless, acute morbidity is still viewed as an important component of the broad public health burden associated with air pollution , and benefits assessments will undoubtedly continue to include acute morbidity effects. Thus, future assessments will need to address deficiencies in past work dealing with acute morbidity, including failure to consistently employ a comprehensive, explicit approach to capturing all components of the societal value of reduced morbidity and differing levels of severity of symptoms and activity restrictions.
In earlier analyses [3, 5], consideration of morbidity effects of air pollution was restricted to a limited range of symptoms and activity restrictions as observed in clinical and epidemiological studies. These assessments, as well as more recent ones , relied heavily on contingent valuation studies [11–13] in which individual willingness to pay (WTP) to avoid a variety of symptoms of varying duration was evaluated. In more recent assessments, there has been a greater reliance on cost of illness (COI) data, comprising medical costs and lost production experienced by society as a result of a health effect. However, these measures represent at best a lower bound on the total societal value of avoiding these health outcomes , since they reflect only one element of this value. In some assessments, no adjustments have been made to correct for this bias [6, 7], while in others, empirical evidence from studies which simultaneously measured COI and individual WTP have been used to derive adjustment factors [1, 4, 15–17]. Such adjustments recognize deficiencies in available estimates, but applying them uniformly to a variety of cardiorespiratory conditions could introduce error in benefits assessments. An additional issue is that most previous assessments have relied heavily upon valuation estimates derived from U.S. data, the applicability of which outside the U.S. can be questioned.
In the present study, our objective was to estimate the benefits of avoiding a variety of acute cardiorespiratory morbidity outcomes which have been linked epidemiologically to air pollution, using complementary data on COI and individual WTP. In contrast to the lack of a consistent, comprehensive approach in earlier studies, particular features of our approach include application to all outcomes of: a consistent conceptual model of the nature of acute episodes of cardiorespiratory disease, including differing levels of severity of symptoms and activity restrictions; a comprehensive valuation framework encompassing all aspects of the value of avoided morbidity and a recognition of the perspective (societal versus individual) from which primary data were collected; a common source of inputs based on empirical data on the duration and severity of episodes of cardiorespiratory disease; and an estimation procedure which propagates uncertainty in key inputs.
Conceptual model of acute cardiorespiratory morbidity
We identified several types of acute cardiorespiratory morbidity which have been linked with air pollution in epidemiological studies: respiratory and cardiac hospital admissions and emergency department visits, restricted activity days, asthma symptom days, and acute respiratory symptom days [18–21]. Based on this literature, we identified asthma, chronic obstructive pulmonary disease (COPD), respiratory infections, congestive heart failure, cardiac dysrhythmias, and myocardial infarction/angina, as well as mild non-specific respiratory symptoms, as the principal conditions of interest [18–22].
As a general framework, we viewed these conditions as occurring in the form of acute episodes superimposed upon the underlying baseline health state. The extent to which health status departed from its premorbid level could be expected to vary during the course of the episode, so that the episode of illness could be characterized as the sum of several periods, each of which is associated with a given decrement from baseline health status. Depending on the nature of the morbidity outcome, these periods might include periods spent in or out of hospital, and in various states of restriction of activity.
Reduced morbidity due to cleaner ambient air represents real economic value to individuals and society, measured most appropriately in a welfare economic framework by WTP to improve health or willingness to accept compensation (WTA) to worsen it . Measures such as quality- or disability-adjusted life years (QALYs or DALYs) represent an alternative measure which generically reflects preferences among health states involving loss of quality and/or quantity of life . However, experience with application to acute effects of air pollution is limited , and unlike dollar valuation of health outcomes, these measures do not permit direct comparisons to costs. WTP (and WTA) are generally regarded as comprising several components: expenditures related to medical treatment of adverse health effects, including costs of treatment as well as related out of pocket expenditures (for example, for assistance in completing usual unpaid chores that the individual is unable to undertake as a result of ill health); the dollar value of interruption in work duties, which can range from decreased productivity to absence from the workplace; expenditures to avert or mitigate future occurrences of the effect (eg. purchasing an air conditioning unit as a means of reducing the chances of an asthma attack associated with outdoor air pollution); and the dollar value of pain and suffering, inconvenience, restrictions and reduced enjoyment of leisure activities, anxiety about the future, and concern and inconvenience to family members and others . The perspective of the analysis (societal versus individual) is clearly an important consideration, in that individual WTP will not reflect medical expenditures and lost productivity where there is third party payment of medical expenditures or paid sick leave [8, 14, 26].
A comprehensive measure of the total value, from a societal perspective, of avoiding the acute cardio-respiratory morbidity effects of air pollution can therefore be expressed as follows:
VT = VAE + VPS + VCOT + VLP (1)
VAE = value of reduced averting expenditures;
VPS = value of reduced pain and suffering;
VCOT = cost of treatment including reduced expenditures on mitigation of the illness; and
VLP = value of lost productivity.
Sources of empirical data
Description of symptoms and activity restrictions
Type of symptom/activity restriction
Stuffy or runny nose and sore throat.
Coughing, wheezing, shortness of breath.
Coughing or wheezing with fever, chills, aching all over.
Fluttering in chest and feeling light-headed
Congestive Heart Failure
Shortness of breath, and swelling in ankles and feet.
Pain in chest or arm.
Can go to work, go to school, do housework, and participate in social or recreational activities, but have some physicial limitations (trouble bending, stooping, or doing vigorous activities because of this health condition).
Can go to work, go to school, do housework, but have some physical limitations (trouble bending, stooping, or doing vigorous activities), and cannot participate in social or recreational activities because of this health condition.
Cannot leave house, go to work, go to school, do housework, participate in social or recreational activities, and have some physical limitations (trouble bending, stooping, or doing vigorous activities) because of this health condition, but can care for self.
Help caring for Self
Cannot leave house, go to work, go to school, do housework, participate in social or recreational activities, and need help caring for self (feeding, bathing, dressing, toilet).
In hospital and need help caring for self (feeding, bathing, dressing, toilet)
In the second study, data were collected prospectively on individuals visiting emergency departments for cardiorespiratory conditions, as part of an epidemiological study of air pollution in Saint John, Canada between 1992 and 1996 [29, 33]. A random sample of those agreeing to follow-up was contacted two weeks after their visit and asked to complete a structured telephone interview, in which information was collected on the duration of the disease episode which prompted their visit, disposition of their visit (whether they were admitted or discharged), and the occurrence of various outcomes including restricted activity days, days of missed work for the patient, parent, or other care giver, health care utilization and illness-related expenses, from the onset of their earliest symptoms until the follow-up interview. Data were obtained for 1,772 individuals. Inpatient utilization data were also abstracted from the clinical records of 393 randomly selected patients representing the same groups of cardiorespiratory conditions, and cost of illness estimates were generated which included fully allocated costs related to hospital utilization and emergency department visits, as well as costs of physician visits, medication use, equipment, and out-of-pocket expenses . We analyzed these data using stepwise ordinary least squares regression. Selection of the final multi-variate model was based on minimization of Akaike's Information Criterion, the deviance penalized for the number of parameters being estimated . Compared to other literature in this area, this study has the advantage of having been designed specifically to prospectively quantify the broad quality of life impacts and COI associated with episodes of cardiorespiratory disease, thus ensuring that the required data elements were collected in a consistent, coordinated fashion. Cost analysis was carried out in a manner consistent with current methodological standards.
Based on these two studies, we calculated VT according to Equation (1) as follows:
where Si, Aj, and Dk are the symptom complex, level of activity restriction and duration of the illness episode respectively (See  for details of the stated preference valuation estimation procedure).
VCOT = f (diagnosis, duration, admission to critical care/non critical care) (See results section below for model specification);
VLP = DLP × WD
where DLP = duration of lost productivity in days; and WD is the average daily wage for Canada in 1997 of $119.60 .
While recent recommendations note the friction cost method as an alternative to the conventional human capital approach as potentially more accurately reflecting the ability to replace disabled workers, thus minimizing societal productivity losses [26, 36], we assumed that this was not applicable in the current context, where illness episodes are of short duration. We did not attempt to value productivity losses not resulting in lost time (i.e. reduced work capacity), but we did capture time lost by parents and other care givers.
Mapping of symptoms and activity restrictions to health outcomes examined in epidemiological studies
Symptom Weightings (proportions)
Congestive Heart Failure
Activity Level Weightings (proportions)
Need help caring for self
Mapping of symptoms and levels of activity restrictions to a given outcome was derived from empirical data from our own emergency department study , and from a population-based survey in Strasbourg, France on the prevalence of minor respiratory symptoms . Adjustments were made, where applicable, to shift the distribution towards the mild end of the spectrum to reflect those individuals who do not visit the emergency department and whose symptoms are presumably less severe on average.
The definitions of a number of health outcomes as examined in the air pollution epidemiology literature overlap with one another (e.g. hospital admissions and emergency department visits, restricted activity days and acute respiratory symptoms), and this is reflected in our mapping of these outcomes as shown in Table 2. This needs to be considered in order to avoid double counting of benefits among these health outcomes. Procedures have been suggested to deal with this, for instance by subtracting occurrences of restricted activity days, from those related to acute respiratory symptom days, prior to applying valuation estimates .
Inputs on duration and disposition for valuation calculations
Number of days:
Out of Hospital
Individuals admitted to hospital
Chronic Obstructive Pulmonary Disease
Congestive Heart Failure
Individuals visiting emergency department
Chronic Obstructive Pulmonary Disease
Congestive Heart Failure
Valuation estimates for cardiac and respiratory hospital admissions and emergency department visits were calculated as the weighted average among specific cardiac and respiratory conditions, with the weights based on the proportion of hospital admissions and emergency department visits accounted for by these conditions as reported in Burnett et al.  and Stieb et al. .
We obtained Monte Carlo estimates for each morbidity outcome by iteratively calculating its components (n = 1000), sampling from the observed distributions of model parameters, accounting for correlation among parameters, and from the observed distributions of input values. We report a central estimate which reflects model results evaluated at the mean of input values, and a 95% confidence interval bounded by the 2.5th and 97.5th percentiles of the output distribution. Where demographic information (age, education, income) and population health status were employed as independent variables in calculating stated-preference values, we conducted a sensitivity analysis by employing both the values of these variables in the original survey sample, as well as values based on the 1996 Canadian census and the 1996 National Population Health Survey . While specific subgroups of those experiencing acute episodes of cardiorespiratory disease may be more specifically susceptible to air pollution as a trigger, and the severity of their disease episodes may differ from others, it is not possible to identify these groups with confidence. In order to deal with uncertainty generated by this issue, we also conducted a sensitivity analysis by varying the weight given to the least versus most severe levels of activity restriction and symptoms. When comparing our results with those from earlier studies, we converted values from other countries to the same year in Canadian dollars using purchasing power parity . They were adjusted to 1997 Canadian dollars using the consumer price index for Canada for either all goods and services (WTP based estimates) or for health care (cost of treatment based estimates) . While caution should be exercised in transferring our estimates to other countries, a similar procedure would be employed to do this, by applying the 1997 purchasing power parity between Canada and the target country, and adjusting to the currency year of interest using the country specific consumer price index for all goods and services.
Cost of treatment model
Parameter estimates for cost of treatment model
Parameter Estimate ($)
Standard Error ($)
VCOT = α + βASAS + βCHFCHF + βDD + βCCCC + βNCCNCC + βAS*DAS*D + βRI*DRI*D + βMIA*DMIA*D + βRI*CCRI*CC + βDYS*CCDYS*CC
Dummy variable for diagnosis of asthma (0,1)
Dummy variable for diagnosis of congestive heart failure (0,1)
Total duration of disease episode (days)
Dummy variable for admission to hospital in critical care unit (0,1)
Dummy variable for admission to hospital in non-critical care unit (0,1)
Interaction term (see variable definitions above)
Interaction term where RI is a dummy variable for diagnosis of respiratory infection (0,1)
Interaction term where MIA is a dummy variable for diagnosis of myocardial infarction/angina (0,1)
Interaction term (see variable definitions above)
Interaction term where DYS is a dummy variable for diagnosis of dysrhythmia (0,1)
Interaction term (see variable definitions above)
Interaction term (see variable definitions above)
Interaction term (see variable definitions above)
Comprehensive valuation estimates
Valuation estimatesa and ratio of total value to cost of illness, by endpoint and component
Cost of Treatment (CoT)
Lost Productivity (LP)
Pain, Suffering and Averting Expenditures
Total Value/(CoT + LP)
Respiratory Hospital Admission
Cardiac Hospital Admission
Respiratory Emergency Department Visit
Cardiac Emergency Department Visit
Restricted Activity Day
Asthma Symptom Day
Acute Respiratory Symptom Day
Results were not sensitive to choice of input values for demographic and health status characteristics (original survey sample characteristics versus nationally representative values for Canada). Sensitivity to the weighting given to the levels of activity restriction differed among the endpoints. The total value of avoiding respiratory and cardiac hospital admissions and emergency department visits varied by less than 10% from base estimates when we varied the weighting given to least versus most restrictive health states based on empirical data as described earlier. Relative to the base values, the total value of avoiding restricted activity days and asthma symptom days was respectively 54 and 57% lower and 65 and 104% higher when weighting of the different health states was varied. In all of the sensitivity analyses for restricted activity days and asthma symptom days, point estimates fell within the 95% confidence intervals on the base case estimates. However, the 95% confidence interval on the valuation estimate for asthma symptom days with less severe activity restrictions overlapped 0. For acute respiratory symptom days, valuation estimates for less and greater activity restrictions were respectively $12 and $28, both of which were within the 95% confidence interval on the base case estimate. In all cases the 95% confidence interval overlapped 0.
Our estimates of the value of avoiding a range of acute effects of air pollution on cardiorespiratory morbidity are generally consistent with expectation in terms of the magnitude of values relative to severity and duration. The higher valuation of avoiding cardiac compared to respiratory disease episodes is driven mainly by the much higher proportion of cardiac conditions requiring admission to hospital, critical care, and invasive procedures . Valuation for emergency department visits for both types of conditions includes cost of treatment related to hospital admission for those patients who were ultimately admitted. Because cardiac patients were much more likely to be admitted, this is reflected in a much larger cost of treatment value for cardiac compared to respiratory emergency department visits. While this would result in double counting of benefits where both hospital admissions and emergency visits are assessed and monetized in a benefits analysis, this approach was considered appropriate because concentration-response relationships for air pollution and emergency department visits are based on all those who visit the emergency department, including those who are ultimately admitted to hospital. Where both types of outcomes are being considered in benefits analysis, double counting can be avoided by using concentration-response relationships for emergency department visits to capture both types of effects, either by using relationships taken directly from epidemiological studies of air pollution and emergency department visits, or scaling up concentration response relationships from studies of hospital admissions, based on the expected ratio between hospital admissions and emergency department visits . (See illustrative example below.)
Comparison with existing estimates
Nonetheless, in general, our estimates are comparable in magnitude to those from earlier studies in this area. A priori, we might have expected that our more comprehensive approach would have resulted in somewhat higher estimates compared to earlier studies. We observed that valuation estimates for the less severe outcomes were sensitive to specification of severity level, such that specifying a higher level of severity produced estimates at the higher end of those reported in earlier studies. It is also possible that in the context of the less severe outcomes which are associated with relatively low valuation, our approach, though more comprehensive, adds only small increments which do not result in a substantial change in magnitude of the overall estimate
Our estimates for hospital admissions are less than in most earlier studies. With respect to the cost of treatment component for this outcome, compared to the Anis et al. study , two studies based on U.S. data reported higher costs for pneumonia  and congestive heart failure , while another from Canada revealed similar costs for asthma hospital admissions [, personal communication, Dr. W. Ungar, November 2002]. Estimates from the U.K. were also similar to those derived here . The estimates advanced by Chestnut et al. , though developed for Canada, are also based partially on U.S. data . These findings may reflect true systematic differences in costs of treatment in the U.S. compared to Canada and the U.K.. It has been documented that intensity of care for some conditions is greater in the United States than Canada , and that administrative/overhead costs are significantly higher in the U.S. than in Canada in relation to the multiple versus single payer systems in the two countries [50, 51]. Given that the ratios we observed for total value to COI were generally similar to (or indeed at the lower end of) those reported previously [1, 4, 15–17], this indicates that the component of valuation related to avoided pain and suffering and averting expenditures is also lower than earlier estimates. This may suggest that WTP to avoid health outcomes associated with significant health care costs may be lower in the context of a publicly funded universal health care system, possibly because of lower perceived risks of catastrophic financial consequences. Thus it appears that in the case of hospital admissions, the impact of our more comprehensive approach to valuation is overshadowed by lower costs of treatment in Canada compared to the U.S., which has been the predominant source of earlier such estimates.
Limitations of our approach
While we believe our results represent an advance over earlier estimates, there are several limitations which could be addressed in future work in this area. The model we employed for stated preference values was non-linear with respect to duration of the illness episode, implying diminishing marginal utility for reduced morbidity with respect to duration . However, we assumed simple additivity of the individual blocks of time constituting each segment of activity restriction of varying severity in the context of an illness episode. This was necessitated by the finding in the context of the original stated preference survey, that presenting individuals with illness episode scenarios involving an evolution of level of activity restriction was overly burdensome for respondents. Our assumption of simple additivity is likely to lead to overestimates of total value relative to the observation in the original study of diminishing marginal utility with respect to duration . The extent of bias requires further empirical evaluation. Additional development work would be needed to determine how best to communicate this information to respondents in a straightforward yet accurate way, and to elicit valuation information appropriately.
Our analysis relied on data from two studies carried out in single centres (Saint John and Toronto). While we found that our results were not sensitive to demographic and health status differences between the original stated preference survey sample and Canada as a whole, repeating the survey in multiple centres would nevertheless be desirable, as would collecting illness episode, cost of treatment, and stated preference information from the same sample of respondents.
Response rate is a potential concern for both the cost of illness study and the stated preference survey. Response rates to the emergency department follow-up survey were greater than 80% for individuals with asthma and respiratory infections, but only 50% and 67% for those with COPD and cardiac conditions respectively. Those with cardiac conditions who completed follow-up interviews were younger (and possibly healthier) than those who did not . Cost of treatment estimates may therefore be conservative relative to a fully representative population of patients of all degrees of severity. Lower and upper bounds on the response rate for the stated preference survey were 22 and 63 percent, assuming that respectively all or none of the telephone numbers which could not be contacted or verified as households were included in the denominator . Of prospective subjects who completed the screening telephone survey, 45 percent agreed to take the in-person survey, while 72 percent of those who scheduled an appointment actually completed the in-person survey . Thus, a substantial portion of the sample did not complete the in-person survey. While a low response rate would raise concerns about the representativeness of the sample, no major differences were observed with respect to demographic characteristics or health status characteristics which were found to influence WTP in this study.
An additional potential limitation of our results is the possibility of double counting of out of pocket expenditures, which could potentially have been captured by both the cost of treatment study and the stated preference willingness to pay study. Ungar et al.  found that out of pocket expenses accounted for only 1 per cent of annual per patient treatment costs for asthma, which suggests that this is probably not an important issue.
An illustrative example
We illustrate the application of our approach by examining the benefits associated with reduced cardiorespiratory emergency department visits and hospital admissions attributable to the decline in particulate sulfate concentrations observed in Toronto from the mid 1980s to the late 1990s. Average particulate sulfate concentrations in the Toronto Census Metropolitan Area (CMA) declined from 5.0 μg/m3 (1984–1986 average) to 3.8 μg/m3 (1997–1999 average) during this period. We estimated the benefits in 2000 when the estimated population was 4.771 million, using results from an epidemiological study examining the association of air pollution with hospital admissions for respiratory and cardiac disease in southern Ontario . We used this study rather than more recent work because of recently identified problems with the statistical analysis software which has become the standard over the past 5 to 6 years in the analysis of time-series data , the full impact of which is still being evaluated. The rates of admission reported in the study translate into 25,000 cardiac and 28,000 respiratory hospital admissions in the Toronto CMA in 2000. Applying the proportion of cardiac and respiratory emergency department visits resulting in admission to hospital from the Saint John study (76% and 20%), [29, 33] the numbers of hospital admissions correspond to 33,000 cardiac and 140,000 respiratory emergency department visits in 2000. Based on this study, we estimated that a 1.2 μg/m3 decrease in sulfate concentration would respectively result in a 0.30 % decrease in cardiac hospital admissions/emergency department visits (95% CI 0.16–0.45) and a 0.32% decrease in respiratory hospital admissions/emergency department visits (95% CI 0.21–0.43), accounting for the simultaneous effects of ozone and temperature. The proportional reduction is the same for admissions and emergency visits because in this example the concentration response function is simply scaled based on the relative frequency of the two types of outcome.
We estimated the benefits of the observed changes in sulfate concentration, specifying both the concentration response relationship and the valuation estimates generated above as normal distributions based on the point estimate and standard error, using a Monte Carlo simulation with 1,000 iterations implemented using Analytica software . It was estimated that the benefits of reduced emergency department visits for respiratory and cardiac disease were respectively $910,000 and $440,000, while the benefits of reduced respiratory and cardiac hospital admissions were $380,000 and $390,000. However, because essentially all non-elective hospital admissions occur through the emergency department, and the valuation estimates generated above for emergency department visits reflect the probability and valuation of subsequent admission to hospital, the total benefits are simply the sum of those related to emergency department visits or $1.4 million (95% CI 0.91–1.8 million). We emphasize that this estimate does not reflect the much larger benefits attributable to reduced mortality and chronic morbidity.
We believe our overall approach addresses a number of the limitations of the current literature and is widely applicable to future assessments of the benefits of improved air quality. However, because we have noted potentially significant differences between the U.S. and Canada in valuation of certain outcomes, the revised morbidity valuation estimates presented here are most suitable for use in assessing the benefits of air pollution mitigation initiatives in Canada. We recommend employing sensitivity analyses with respect to severity of activity limitation, for those health outcomes where we observed significant sensitivity to this factor.
cost of illness
chronic obstructive pulmonary disease
cost of treatment
willingness to pay
willingness to accept compensation
The authors are grateful to Curt Rabon for programming assistance and to Tom Dann of Environment Canada for providing historical air quality data. Funding was provided by Health Canada.
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