Health Shocks under Hospital Capacity Constraints: Evidence from Air Pollution in São Paulo, Brazil

Bruna Morais Guidetti () and Edson Roberto Severnini Paula Carvalho Pereda

No 2021_05, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: When a health shock hits a location, the healthcare infrastructure needs to be adjusted to meet the increased demand. is 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: São 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 (search for similar items in EconPapers)
JEL-codes: I15 O13 Q53 Q56 (search for similar items in EconPapers)
Date: 2021-03-12
New Economics Papers: this item is included in nep-ene, nep-env and nep-lam
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