The Healthcare Cost of Air Pollution: Evidence from the World's Largest Payment Network

79 Pages Posted: 13 Jun 2018 Last revised: 17 Jun 2021

See all articles by Panle Jia Barwick

Panle Jia Barwick

Cornell University - Department of Economics

Shanjun Li

Cornell University - School of Applied Economics and Management

Deyu Rao

Cornell University

Nahim Zahur

Cornell University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: June 2018

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.

Suggested Citation

Barwick, Panle Jia and Li, Shanjun and Rao, Deyu and Zahur, Nahim, The Healthcare Cost of Air Pollution: Evidence from the World's Largest Payment Network (June 2018). NBER Working Paper No. w24688, Available at SSRN: https://ssrn.com/abstract=3194839

Panle Jia Barwick (Contact Author)

Cornell University - Department of Economics ( email )

414 Uris Hall
Ithaca, NY 14853-7601
United States

Shanjun Li

Cornell University - School of Applied Economics and Management ( email )

248 Warren Hall
Ithaca, NY 14853
United States

Deyu Rao

Cornell University ( email )

Ithaca, NY 14853
United States

Nahim Zahur

Cornell University - Department of Economics ( email )

414 Uris Hall
Ithaca, NY 14853-7601
United States

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