Common air pollution indicators and their use in economic studies

The previous article discussed the role of six different types of pollution in the degradation of the environment. These were air, water, soil, thermal, noise and radiation pollution. The article also identified some of the key factors that contribute to the degradation and counteractive measures that developing countries can adopt. Air pollution is one of those six types of pollution that contaminates the environment. It is a major contributor. Researchers in the field of economics use these common air pollution indicators to assess the impact of air pollution on macro and microeconomic issues such as policy making, economic growth, and prediction of welfare costs.

Air pollution sources

Air pollution typically consists of a complex combination of several substances in dissimilar chemical and physical states (Jain & Palwa, 2015). Also, there are different sources that are primarily responsible for releasing these substances into the atmosphere such as anthropogenic and natural sources. According to the World Health Organization (WHO), among the various air pollutants, those are considered as ‘pollution indicators’ and can be quantified on a global level.

Ambient air pollution indicators

Ambient air pollution has emerged as a major threat to mankind. It is accountable for a large number of deaths around the world due to respiratory and cardiac diseases. Also, approximately 91% of the global population lives in places where ambient air pollution level is more than the limits of the World Health Organization (WHO, 2018). The main sources of ambient air pollution are human activity. These are fuels from automobiles, generation of heat and power from power plants, industrial production activities, waste materials, and residential activities. As a result, several pollutants find their way into the atmosphere. These pollutants serve as ‘air pollution indicators’ and they include:

  • Particulate matter (PM)
  • Ground level ozone (O3)
  • Carbon dioxide (CO2)
  • Carbon monoxide (CO)
  • Nitrogen dioxide (NO2)
  • Sulphur dioxide (SO2).

Causes for emissions from these indicators

According to WHO, PM, O3, NO2 and SO2 are the most harmful effects on human health on the short term or long term. NO2 occurs in the environment mainly due to the production of power, industrial goods and from automobiles. It is one of the main components of PM and O3. On the other hand, sulphur dioxide emission is largely due to the burning of fossil fuels such as petroleum and coal. Combustion of fossil fuels also majorly contribute to the emission of carbon monoxide. Besides, automobiles also emit CO. Moreover carbon dioxide and ozone are part of Greenhouse gases (GHG) which intensify the current problem of global warming. Using data from the World Bank, the figure below depicts the total global GHG emissions since 1991 as a percentage change from the pre-industrial baseline level of 1990.

Figure 1: Total GHG emissions as % changes from 1990 to 2012 (Source: World Bank)
Figure 1: Total GHG emissions as % changes from 1990 to 2012 (Source: World Bank)

A large number of efforts are evident in various countries to curb the emissions of GHG. However, the data above shows a 40% jump in 2012 as compared to 1990 levels. Despite all the climate control efforts at the global level, GHG emissions are on a rise.

Household air pollution indicators

Air pollution in the household occurs as a result of cooking and heating using fuels such as wood, coal and kerosene. Various gases and chemicals from these activities constitute the source of household air pollution. It poses serious health risks, especially in the developing countries where the use of these sources of fuels is still rampant. The most common form of household air pollution is smoke. Furthermore, the associated air pollution indicators are:

  • Particulate matter
  • Black carbon
  • Carbon monoxide
  • Methane.

National air quality index of India

The Ministry of Environment, Forest and Climate Change formulated ‘The National Air Quality Index’ (AQI) and launched it in October 2014 as a part of Swachh Bharat Mission. The objective of this was to broaden the number of air pollution indicators from three to eight and easy access of information on air quality for the public by putting them in the public domain (Central Pollution Control Board, 2018). The eight pollutants are:

  • Particulate matter PM10
  • Particulate matter PM5
  • Nitrogen dioxide
  • Sulphur dioxide
  • Carbon monoxide
  • Ozone
  • Ammonia
  • Lead .

The Ministry identified six categories (good, satisfactory, moderately polluted, poor, very poor, severe) of air quality on the basis of the ambient concentration of each of these eight pollutants.

Use of air pollution indicators in economic studies

The commonly used indicators in the economic studies of the environment are PM, NO2, SO2, and CO2. Popular studies in recent years take into consideration these factors for analysis. The below table presents some of these studies.

Baycan, (2013) The author examined the relationship between per capita income growth and air pollution levels in the EU countries taking four indicators; PM, SO2, CO2 and NOx (nitrogen dioxide and nitric oxide taken together) using Environmental Kuznets Curve (EKC) hypothesis.
(Luo et al., 2014) Authors considered PM10, SO2 and NO2 in exploring the relationship between economic development and air pollutants in the provincial capital cities of Chinese mainland during 2003-2012.
Carriazo, (2016) The author tested the EKC hypothesis by examining the relationship between economic growth and carbon dioxide emissions in a cross-sectional sample of 152 countries.
Greenstone & Hanna, (2014) Authors analysed comprehensive data on NO2, SO2 and PM of India for 1987-2007 to study the effectiveness of environmental regulations in the country.
(WHO Regional Office for Europe OECD, 2015) WHO used PM to study the economic cost of health due to ambient and household air pollution in the EU. The reason for this was the largest share of the burden of diseases (BOD) coming from exposure to PM and also the resulting long term health effects.

Table 1: Studies on air pollution indicators in economic studies in recent years.

Different countries and institutions might consider a specific set of pollutants as air pollution indicators. This article focused on the indicators that the WHO considers at a global level. Therefore it is conventional to treat certain air pollutants as indicators, provided it is feasible to monitor their levels. Further articles in this study show an empirical analysis to examine the impact of foreign direct investment on air pollution indicators.


Priya is the co-founder and Managing Partner of Project Guru, a research and analytics firm based in Gurgaon. She is responsible for the human resource planning and operations functions. Her expertise in analytics has been used in a number of service-based industries like education and financial services.

Her foundational educational is from St. Xaviers High School (Mumbai). She also holds MBA degree in Marketing and Finance from the Indian Institute of Planning and Management, Delhi (2008).

Some of the notable projects she has worked on include:

  • Using systems thinking to improve sustainability in operations: A study carried out in Malaysia in partnership with Universiti Kuala Lumpur.
  • Assessing customer satisfaction with in-house doctors of Jiva Ayurveda (a project executed for the company)
  • Predicting the potential impact of green hydrogen microgirds (A project executed for the Government of South Africa)

She is a key contributor to the in-house research platform Knowledge Tank.

She currently holds over 300 citations from her contributions to the platform.

She has also been a guest speaker at various institutes such as JIMS (Delhi), BPIT (Delhi), and SVU (Tirupati).