Abstract
This paper discusses the impact of air pollution on medical expenditure in eastern, central, and western China by applying the fixed-effect model, random-effect model, and panel threshold regression model. According to theoretical and empirical analyses, there are different relationships between the two indexes in different regions of China. For eastern and central regions, it is obvious that the more serious the air pollution is, the more medical expenses there are. However, there is a non-linear single threshold effect between air pollution and health care expenditure in the western region. When air pollution is lower than this value, there is a negative correlation between them. Conversely, the health care expenditure increases with the aggravation of air pollution, but the added value is not enough to make up for the health problems caused by air pollution. The empirical results are basically consistent with the theoretical analysis, which can provide enlightenment for the government to consider the role of air pollution in medical expenditure. Policymakers should arrange the medical budget reasonably, according to its situation, to make up for the loss caused by air pollution.
Highlights
Industry has contributed a lot to economic development in any country
Εit, εit, if APit ≤ γ if APit > γ where APit is the provincial industrial waste gas discharge volume per capita, which is the central variable of the threshold model; γ is the relative value of APit; eit is the provincial health care expenditure per capita; β1 and β2 are the coefficients associated with APit; xit are other variables which can affect health care expenditure; α1 and α2 are relative coefficients of them; μit represents a fixed utility to adapt to the changes in conditions affecting different provinces; εit is random error term with εit ∼ (0, σ 2); and i and t represent provinces and time
The first part uses fixed-effect and random-effect models to verify the impact of air pollution on medical expenditure in eastern, central, and western China
Summary
Industry has contributed a lot to economic development in any country. The rapid rise and vigorous development of industry is a vital consideration of economic development, which is reflected in the improvement of national income and per capita income, international trade, employment, urbanization level, and so on. Due to the global environmental impact of industrial waste gas and detrimental effects for the health of humans, it has gradually become a topic of concern This is mainly because industrial pollution is imposed on those who do not produce pollution in economic production in a negative external form. Air pollution is the largest single environmental health risk on Earth and will soon become a vital cause of disease and death in low-income countries. These industrial exhaust emissions are often accompanied by excessive temperature and heat generation, which subtly changes the climate, changing people’s arterial pressure and blood viscosity, and causes
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