Air Pollution, Health, and Avoidance Behavior: Evidence from South Korea

Abstract

Using detailed data on the beneficiaries of the Korean National Health Insurance Service (c.2006-2015), this paper estimates the health effects of air pollution in South Korea while controlling for avoidance behaviors. In particular, I investigate changes in the respiratory hospitalization rates due to increases in PM10 and O3 concentrations. To address the endogeneity of air pollution, this paper applies the historical average concentration of air pollution that includes rich information about the meteorological and geographical factors that affect regional air pollution levels as an instrumental variable and compares the results with other count data models. I find that a 10mg/m3 increase in PM10 and a 10ppb increase in O3 lead to an increase in daily respiratory hospital visits of up to 10.39% (95% confidence intervals (CI): 4.04--16.80) and 10.93% (95% CI: 9.23-12.63), which results in additional health care costs of $67 million USD and $70 million USD, respectively. This paper also shows that the effects of PM10 and O3 are greater in more populated cities, on children's health, and for non-chronic respiratory patients.