The Short-Term Impact of Air Pollution on Medical Expenditure: Evidence from Beijing

62 Pages Posted: 20 Oct 2020 Last revised: 6 May 2022

See all articles by Fan Xia

Fan Xia

Nanjing University - School of the Environment; Peking University, National School of Development

Jianwei Xing

Peking University - National School of Development

Jintao Xu

Peking University

Xiaochuan Pan

Peking University

Date Written: April 20, 2022

Abstract

We identify the short-term effects of PM2.5 concentrations on medical costs in Beijing by analyzing two datasets: one detailing daily air quality indexes over a four-year period and the other containing individual-level records of all health care visits and medical transactions that occurred under a government insurance program that covers most city residents. We find that both higher levels of air pollution and longer-lasting pollution episodes significantly increase health care visits and medical expenditures. An analysis of multiple-day pollution episodes shows that marginal health care visits and marginal health costs start to increase as the pollution event lasts for consecutive days. Omitting the variation in the magnitude of the marginal effects of pollution exposure over the course of a pollution episode would lead to the underestimation of the total health costs of air pollution. Our findings provide empirical evidence that both the intensity and the duration of pollution episodes are critical considerations when designing policies to reduce the health costs of air pollution.

Keywords: air pollution, medical costs, heterogeneous impacts, pollution episodes

JEL Classification: I15, Q51, Q53

Suggested Citation

Xia, Fan and Xing, Jianwei and Xu, Jintao and Pan, Xiaochuan, The Short-Term Impact of Air Pollution on Medical Expenditure: Evidence from Beijing (April 20, 2022). Available at SSRN: https://ssrn.com/abstract=3684660 or http://dx.doi.org/10.2139/ssrn.3684660

Fan Xia

Nanjing University - School of the Environment ( email )

Nanjing
China

Peking University, National School of Development ( email )

Beijing
China

Jianwei Xing (Contact Author)

Peking University - National School of Development ( email )

Beijing, 100871
China

Jintao Xu

Peking University ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

Xiaochuan Pan

Peking University

No. 38 Xueyuan Road
Haidian District
Beijing, 100871
China

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