Health Shocks Under Hospital Capacity Constraint: Evidence from Air Pollution in Sao Paulo, Brazil

52 Pages Posted: 14 May 2020

See all articles by Bruna Guidetti

Bruna Guidetti

University of Michigan at Ann Arbor

Paula Pereda

FEA USP

Edson Severnini

Carnegie Mellon University

Abstract

When a health shock hits a location, the healthcare infrastructure needs to be adjusted to meet the increased demand. This may be a challenge in developing countries because of limited hospital capacity. In this study, we examine the consequences of health shocks induced by air pollution in a megacity in the developing world: Sao Paulo, Brazil. Using daily data from 2015-2017, and an instrumental variable approach based on wind speed, we provide evidence that exposure to particulate matter (PM10) causes an increase in pediatric hospitalizations for respiratory diseases, which in turn leads to a decrease in hospital admissions for elective care – phimosis surgery and epilepsy-related procedures such as video-EEG (electroencephalograph) monitoring. Importantly, emergency procedures such as appendectomy and bone fracture repair are not affected. While strained Sao Paulo hospitals seem to absorb the increased demand induced by poor air quality, our results imply that the common practice of using health outcomes unrelated to pollution as "placebo tests" in studies on the effects of air pollution might be inadequate in settings with limited healthcare infrastructure. This is often the case in developing countries, where severe pollution is also ubiquitous, but also happens in deprived areas in the developed world.

Keywords: air pollution, health outcomes, hospitalization for respiratory diseases and other causes, healthcare infrastructure, hospital capacity constraint

JEL Classification: I15, Q53, Q56, O13

Suggested Citation

Guidetti, Bruna and Pereda, Paula and Severnini, Edson, Health Shocks Under Hospital Capacity Constraint: Evidence from Air Pollution in Sao Paulo, Brazil. IZA Discussion Paper No. 13211, Available at SSRN: https://ssrn.com/abstract=3596677 or http://dx.doi.org/10.2139/ssrn.3596677

Bruna Guidetti (Contact Author)

University of Michigan at Ann Arbor

Paula Pereda

FEA USP ( email )

São Paulo
Brazil

Edson Severnini

Carnegie Mellon University

Pittsburgh, PA 15213-3890
United States

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