Valuing the Effects of the Environmental Factors on Health Problems in Britain

48 Pages Posted: 17 Nov 2014 Last revised: 26 Jan 2020

See all articles by Oznur Ozdamar

Oznur Ozdamar

Aydın Adnan Menderes University

Eleftherios Giovanis

Manchester Metropolitan University-Business School, Department of Economics, Policy and International Business; Aydin Adnan Menderes University, Nazilli Faculty of Economics and Administrative Sciences

Date Written: November 16, 2014

Abstract

This study explores the effects of air pollution on specific diseases. Moreover, this study explores the willingness to pay for improving the air quality in the UK. The estimates are based on data from the British Household Panel Survey (BHPS) and rely on variations in pollution level and health diseases between interviews over time for the same individual. The effects of air pollution on individuals' health diseases are estimated and their monetary value is calculated. In particular, two air pollutants are examined; ground-level ozone (O3) and carbon monoxide (CO). Moreover, two different approaches are followed. The first approach refers to panel discrete choice binary models, Logit and Probit while the second model is the dynamic Probit Random Effects model. Regarding the skin conditions and allergy health problems the annual monetary values for O3 range between £45-£65 per year for a drop of one unit, while the respective values for the CO range between £70-£87. The respective values for O3 and CO range between £173-£208 and £185-£218 respectively for chest and breathing health problems. Regarding the heart health problems the monetary values for O3 and CO respectively range between £178-£216 and £189-£222. Lastly, the MWTP for an inpatient day in hospital for a one unit reduction in pollution are presented under the current regime (free consultation) as well as under the possible fee of £20 per stay proposed by a former Health minister in UK. Considering that the inpatient elective-planned stay cost per day is £2,749, a 4-5 unit decrease in air pollutants will lead to a MWTP equivalent to the inpatient cost.

Keywords: Air pollution, Environmental valuation, Health Diseases

JEL Classification: I31, Q51, Q53, Q54

Suggested Citation

Ozdamar, Oznur and Giovanis, Eleftherios, Valuing the Effects of the Environmental Factors on Health Problems in Britain (November 16, 2014). Available at SSRN: https://ssrn.com/abstract=2525915 or http://dx.doi.org/10.2139/ssrn.2525915

Oznur Ozdamar

Aydın Adnan Menderes University ( email )

Eleftherios Giovanis (Contact Author)

Manchester Metropolitan University-Business School, Department of Economics, Policy and International Business ( email )

Business School
All Saints Campus
Manchester, M15 6BH
United Kingdom

Aydin Adnan Menderes University, Nazilli Faculty of Economics and Administrative Sciences ( email )

Nazilli IIBF
Sumer Kampusu
Aydin, Nazilli 09800
Turkey

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