Forest Fires, Smoky Kitchens, and Human Health in Indonesia

Abstract

Burning tropical forests to establish lucrative agricultural crops ignores potentially important health externalities of the resulting air pollution. These health externalities are often poorly understood, especially if other environmental hazards, such as indoor pollution, are not taken into account. Given the potential for joint, contemporaneous harms, we estimate the impacts of outdoor and indoor air pollution on respiratory health in Indonesia. To address the endogeneity of air pollution exposure, we use panel fixed effects estimation and instrument for outdoor pollution using upwind forest fire intensity. We find that outdoor air pollution exposure reduces lung capacity and decreases overall health status. Subgroup analysis reveals that these impacts are higher among the youngest and oldest individuals in our sample. Critically, we find suggestive evidence that outdoor air pollution exposure is more harmful to the health of individuals living in households that use clean cooking fuels. Thus, policies aimed at reducing environmental health harms are not substitutable—that is, reductions in both indoor and outdoor air pollution exposures are necessary for achieving health targets.