We contribute to the literature of air pollution and health by assessing an
additional channel, the effect of ENSO on health variables, through several
channels. On the one hand, ENSO manifests as a extreme climatic shock
that follows certain seasonality influencing local weather. ENSO may have
an impact on agriculture or disasters, inducing changes in food market or a
loss of household income. On the other hand, health outcomes are affected
by other factors, which follow additional mechanisms to the previous ones.
This is the case of pollution in urban areas, with a vast literature studying the
effect of pollutants on health. Our research investigates single mechanisms,
i.e., the effect of local weather on health, the impact of ENSO on health,
and the influence of pollution on health. Unlike those studies, we jointly
explore the direct effects of pollution, ENSO and local weather on health.
Therefore, pollutant impacts on health may be interpreted as separated effects
from economic shocks mediated through ENSO. Across all specifications ENSO
affects birth weight and the probability of low birth weight after separating
pollution and classical local weather impacts. Interestingly, the effect on birth
weight of ENSO are several times larger than the impacts of pollution. It
is very relevant from the policy point of view, because despite the exposure
of pollution and regardless the measure we employ, the amount of general
equilibrium impacts exhibited by economic shocks via ENSO events dominate.