Efficient Pollution Regulation: Getting the Prices Right: Corrigendum (Mortality Rate Update) †

When the Air Pollution Emission Experiments and Policy (APEEP) analysis model was first constructed, the model used mortality rate data that differs from more recent and refined data. The most important difference is that the old mortality data for the elderly (populations over 65) were available only as a single category. More recent data breaks the elderly into distinct age groups. 1 Joel Wiles recently pointed out this distinction to us. In this correction, we update the estimates of mar ginal damages and trading ratios reported in Muller and Mendelsohn (2009) to take into account this new, more refined mortality rate data. 2 Table 1 reports the marginal damages across the 9,983 sources covered by the APEEP model. The values labeled “Old” were produced with the APEEP model using the old mortality rate data, as reported in Muller and Mendelsohn (2009). The new values use the updated mortality rate data, which break down the elderly into distinct age classes (65–74, 75–84, and 85+). 3 Due to missing and suppressed values in this new mortality data, the mortality rates used in the updated analysis are age-specific state averages for counties included in and outside of Census-defined Standard Metropolitan Statistical Areas (SMSAs). The new marginal damage estimates are generally higher. The level of mortality damages is especially sensitive to elderly mortality rates because the elderly account for most of the mortality burden from air pollution and the mortality effect increases rapidly with age. The expected value of the marginal damages for NH 3 and SO2 emissions are now between 50 percent and 60 percent higher than the expected values reported in Muller and Mendelsohn