We investigate the heterogeneous effects of daily particular matter (PM) pollution on Italian hospitalizations and their costs. We exploit public transportation strikes as plausibly-exogenous shocks in PM. We find that young individuals, an arguably healthy age group, exhibit economically meaningful responses to changes in air pollution. A higher prevalence of pollution-induced hospitalizations also exists among the elderly, low educated individuals and migrants coming from low income countries. Our results imply a large role for differential avoidance behavior driving heterogeneous marginal effects. PM exposure also affects the intensive margin since pollution-induced hospitalizations are not only more frequent but they are characterized by a higher complexity, generating additional costs.
 

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