This paper examines the effect of air pollution on child hospitalizations for asthma using a unique zip code level panel data set. The effect of pollution is identified using naturally occurring seasonal variations in pollution within zip codes. I also improve on past work by analyzing how the effect of pollution varies by age, by including measures of avoidance behavior, and by allowing the effect to vary by socioeconomic status (SES). Of the pollutants considered, carbon monoxide has a significant effect on asthma hospitalizations among children ages 1 to 18. To assess the importance of these findings, I analyze California's Low-Emission Vehicle II standards and find that nearly 15-20% of the costs from this policy are recovered in asthma hospitalizations for children alone. In addition, households respond to information about pollution with avoidance behavior, especially high SES families, suggesting that it is important to account for these endogenous responses when measuring the causal effect of pollution on health. Finally, the net effect of pollution is greater for children of lower SES, indicating that pollution is one potential mechanism by which SES affects health.JEL Classifications: I12, J13, J15, Q25