TY  - RPRT
        AU  - Zhang, Xin
AU  - Zhang, Xun
AU  - Liu, Yuehua
AU  - Zhao, Xintong
AU  - Chen, Xi
        TI  - The Morbidity Costs of Air Pollution through the Lens of Health Spending in China
        PY  - 2022/Dec/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 15839
        UR  - https://www.iza.org/index.php/publications/dp15839
        AB  - This study is one of the first investigating the causal evidence of the morbidity costs of fine particulates (PM2.5) for all age cohorts in a developing country, using individual-level health spending data from a basic medical insurance program in Wuhan, China. Our instrumental variable (IV) approach uses thermal inversion to address potential endogeneity in PM2.5 concentrations and shows that PM2.5 imposes a significant impact on healthcare expenditures. The 2SLS estimates suggest that a 10 μg/m3 reduction in monthly average PM2.5 leads to a 2.36% decrease in the value of health spending and a 0.79% decline in the number of transactions in pharmacies and healthcare facilities. Also, this effect, largely driven by the increased spending in pharmacies, is more salient for males and children, as well as middle-aged and older adults. Moreover, our estimates may provide a lower bound to individuals' willingness to pay, amounting to CNY 43.87 (or USD 7.09) per capita per year for a 10 μg/m3 reduction in PM2.5.
        KW  - willingness to pay
KW  - health spending
KW  - air quality
KW  - China
        ER  -