Working Paper: NBER ID: w24688
Authors: Panle Jia Barwick; Shanjun Li; Deyu Rao; Nahim Bin Zahur
Abstract: 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.
Keywords: Air Pollution; Healthcare Costs; PM2.5; China; Consumer Spending
JEL Codes: I15; Q51; Q53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| PM2.5 exposure (I14) | healthcare spending (H51) |
| PM2.5 exposure (past three months) (Q53) | healthcare spending (H51) |
| PM2.5 exposure (I14) | spending in children's hospitals (H51) |
| PM2.5 exposure (I14) | non-healthcare spending (H51) |
| reducing PM2.5 levels (Q53) | healthcare savings (I18) |