The Healthcare Cost of Air Pollution: Evidence from the World’s Largest Payment Network
Panle Barwick (),
Shanjun Li (),
Deyu Rao and
Nahim Bin Zahur
No 24688, NBER Working Papers from National Bureau of Economic Research, Inc
Using the universe of credit- and debit-card transactions in China during 2013-2015, this paper provides the first nationwide analysis of the healthcare cost of PM2.5. We leverage spatial spillovers of PM2.5 from long-range transport for exogenous variation in local pollution and employ a flexible distributed lag model to capture semiparametrically the dynamic response of pollution exposure. Our analysis shows significant impacts of PM2.5 on healthcare spending in both the short and medium terms. A 10 mg/m3 decrease in PM2.5 would reduce annual healthcare spending by more than $9.2 billion, about 1.5% of China’s annual healthcare expenditure.
JEL-codes: I15 Q51 Q53 (search for similar items in EconPapers)
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