The Contemporaneous Impact of Air Pollution on Medical Expenditure: Evidence from Beijing

50 Pages Posted: 20 Oct 2020 Last revised: 15 Mar 2021

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: March 14, 2021

Abstract

We identify the contemporaneous 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 detailing individual-level records of all hospital visits and medical transactions 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 daily hospital visits and medical expenditures. The elderly bear a disproportionately larger percentage of the increases in hospital treatments and expenditures, especially through out-of-pocket costs. Analysis of multiple-day pollution episodes shows that marginal health costs and marginal hospital visits start to increase significantly once high levels of air pollution continue for a second day. Our findings provide empirical evidence that the intensity and duration of air pollution are critical considerations in policy design.

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 Contemporaneous Impact of Air Pollution on Medical Expenditure: Evidence from Beijing (March 14, 2021). 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

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
53
Abstract Views
399
rank
463,119
PlumX Metrics