This study estimates the individual economic benefits of reducing respiratory and cardiovascular hospitalizations, events often associated with air pollution, using cost-of-illness and willingness-to-pay data. Willingness to pay was estimated directly from a survey of Kaiser Permanente patients. Supplemental respondent information pertaining to costs not reflected in the cost of medical services was also obtained from the survey respondents. This information set included the loss of time corresponding to work, recreation, and household production activities, as well as non-pecuniary losses such as pain, suffering, and inconvenience, among other losses. Data on direct medical expenditures were obtained from various sources. We provide improved cost-of-illness and willingness-to-pay information that allows government agencies concerned with air pollution to more accurately assess the benefits and costs of their actions.