Effect of Air Pollution on Cognitive Performance in India

This paper provides a causal estimate of the contemporaneous impact of outdoor air pollution on cognitive and academic performance of children aged 8-11 years in India by combining satellite PM2.5 data with the two rounds of Indian Human Development Survey. Our identification strategy relies on the use of thermal inversions as an instrument that generates exogenous variation in the pollution levels. Results show that exposure to average PM2.5 concentrations in the past 12 months prior to the month of test taken by the
children has a significant detrimental impact on their cognitive ability in India. Specifically, a 1 µg/m3 increase in average PM2.5 concentrations in the past 12 months decreases the math performance by 10-16 percentage points and the reading performance by 7-9
percentage points. We also find that there is a significant fall in the combined agestandardised cognitive score. The results imply that the cost of air pollution in India is much higher than estimated, and a narrow focus on health-related outcomes understate the
magnitude of negative impact of pollution, as mental acuity is essential for higher productivity of children

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