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Abstract:  Ambient air pollution is a leading contributor to mortality and morbidity, particularly in low and middle-income countries, yet there is little evidence of the causal links between ambient air pollution exposure and respiratory health over time. This paper estimates the effects of both spikes in ambient air pollution as well as exposure over time on behavior and health outcomes by leveraging variation in pollution resulting from emissions from forest fires in Indonesia between 1996 and 2015. I combine micro data from the Indonesian Family Life Survey with daily, satellite-derived air pollution measures to generate 19-year individual and household panels. Using these data, I estimate the immediate effects of an unexpectedly severe forest fire season in 2015 on behavior and health. I find an increase in demand for kerosene and vehicle fuel among the most-exposed households as well as a 6 percent decrease in lung capacity among emissions-affected children. I extend my analysis across  the panel using an instrumental variables approach to estimate the effect of average exposure over time on behavior and health. I find that households facing higher average ambient air pollution exposures are more likely to utilize clean cooking fuels such as LPG. Further, I find that a one standard deviation increase in average ambient air pollution over time causes an 8 percent reduction in lung capacity and is associated with increased incidence of asthma. I conclude by estimating one aspect of the productivity costs of ambient air pollution exposure and contextualize these losses in in the growing global threat of forest fire activity exacerbated by climate change, finding that reductions in lung capacity caused by ambient air pollution exposure are associated with a 2-3 percent decline in annual earnings.

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