Conference Agenda

This study investigates whether income inequality within a population influences the health effects of pollution. We first develop a stylized theoretical model to identify potential mechanisms through which income distribution may amplify vulnerability to pollution. The model highlights three main channels: differences in public health expenditure, unequal exposure to pollution, and variations in private health spending across income groups. We then empirically test these predictions by estimating the causal impact of particulate matter (PM10) on mortality in all French municipalities with more than 2,000 inhabitants over the period 2000–2015, using wind direction as an instrumental variable. Our findings reveal a statistically and economically significant impact of pollution exposure on the mortality of individuals aged 50 or older, which intensifies in municipalities with higher levels of income inequality. While the effect of PM10 is not significant in the least unequal municipalities (bottom 33%), it is significant and increases with inequality levels in others. The impact in the most unequal municipalities (top 33%) is up to twice as large as in those with intermediate inequality levels. This result is particularly striking given France's relatively low income inequality. Empirical tests of the theoretical mechanisms reveal that the observed variation in pollution vulnerability across inequality-stratified municipalities is not attributable to differences in public health expenditure, pollution exposure (between or within municipalities), or poverty prevalence and intensity. Our results suggest that inequality plays a significant role in shaping environmental health outcomes, likely related to private health expenditures, their determinants, or their effectiveness, warranting further research.