IntroductionAir pollution remains a global problem, especially in heavily industrialized nations such as the United States. Some progress has been made in recent years, however, due in large part to the provisions of the Clean Air Act of 1970 and subsequent federal regulations. The purpose and organization of the paper are described in this section.

How Air Pollution is Measured

This section is used to provide a description concerning how air pollution is measured and which constituent elements are included in the analysis.

How expensive are damages along with specific damages?

The current estimates of the economic costs of air pollution of around $131 billion each year are explained in this section together with examples of specific damages related to diminished worker productivity, increased inpatient stays and health care costs that are associated with the premature births caused by air pollution.

How pollution represents a market failure and how it affects the economy

A definition of market failures and a discussion concerning how air pollution represents such a failure is provided in this section.

Conclusion

Finally, the conclusion is used to present a summary of the research and key findings concerning the foregoing issues.

HOW AIR POLLUTION IS A MARKET FAILURE AND HOW IT AFFECTS THE ECONOMY

Despite the progress made since the passage of the Clean Air Act of 1970, air pollution remains a global problem, especially in heavily industrialized nations including the United States. Although efforts to respond to the adverse effects of air pollution have some positive economic effects, the overall impact of air pollution is highly negative, making it a clear example of a market failure. The purpose of this paper is to provide a review of the relevant literature to explain how air pollution is measured, how expensive damages are along with specific damages, and a discussion concerning how pollution represents a market failure and how it affects the economy in terms of lost worker productivity, additional health care costs and premature deaths. Finally, the paper presents a summary of the research and key findings concerning the foregoing issues in the...

In this context, PM2.5 is used to refer to the amount of atmospheric particulate matter (PM) with diameters smaller than 2.5 micrometers, and which are visible only with an electron microscope (What is PM2.5 and Why You Should Care 2). In the United States, air pollution is measured by the Environmental Protection Agency (EPA) by analyzing the current concentration levels of PM2.5 together with the other major air pollutant categories covered by the Clean Air Act of 1970 (i.e., ground-level ozone, carbon monoxide, sulfur dioxide, and nitrogen dioxide) (Air Quality Index Basics 2).
To date, the EPA has established nationwide air quality standards for each of these categories of air pollutants and publishes the results of its findings for public review (Air Quality Index Basics 3) as shown in Table 1 below.

The levels of health concern that correspond to each level are defined below:

Each category corresponds to a different level of health concern. The six levels of health concern and what they mean are:

· "Good" (green): AQI is 0 to 50. Air quality is considered satisfactory, and air pollution poses little or no risk.

· "Moderate" (yellow): AQI is 51 to 100. Air quality is acceptable; however, for some pollutants there may be a moderate health concern for a very small number of people. For example, people who are unusually sensitive to ozone may experience respiratory symptoms.

· "Unhealthy for Sensitive Groups" (orange): AQI is 101 to 150. Although general public is not likely to be affected at this AQI range, people with lung disease, older adults and children are at a greater risk from exposure to ozone, whereas persons with heart and lung disease, older adults and children are at greater risk from the presence of particles in the air.

· "Unhealthy" (red): AQI is 151 to 200. Everyone may begin to experience some adverse health effects, and members of the sensitive groups may experience more serious effects.

· "Very…