Abstract
Atmospheric pollution control policies have achieved remarkable progress in China since 2013, and the smog protective equipment market has experienced a great boom during the same period. From the perspectives of the health production efficiency hypothesis and the time discount rate hypothesis, this study investigates the relationship between household expenditures on air pollution avoidance and health care, and individuals’ self-assessed health based on network survey data from 17 cities in China. Using the treatment effect model to control the potential endogenous selection problems, we explain the paradox of the growing smog avoidance investment coexisting with improving air quality. First, smog avoidance investment and household medical expenditures do not have substitution effects, while the perception of pollution intensity, pollution protection knowledge, and future health preferences significantly promote smog avoidance investment and medical expenditures. Second, air pollution avoidance investment greatly increases the probability that urban residents rate their health as “good” and “very good”. The results indicate that the time preference hypothesis can explain the pollution avoidance investment behavior and health demands of Chinese urban residents well. The hidden social welfare loss caused by air pollution may still be underestimated, even though short-term avoidance costs are included in the evaluation of pollution impacts. It is necessary to optimize environmental regulations and policies to consistently improve the ecological environment.
Highlights
On 10 September 2013, the State Council issued the “Air Pollution Prevention and Control Action Plan”, which implemented comprehensive prevention and control measures, such as eliminating backward production facilities, setting emission limits for high-polluting industries, and implementing contract energy management for 47 cities in “three regions and 10 clusters”
Equation (8) is estimated to analyze the impact of air pollution and smog avoidance investment on medical expenditure
The results show that smog avoidance investment always has a positive impact on household health care investment and remains one of the largest influencing factors even though the extent of the impact decreases when additional control variables are included
Summary
On 10 September 2013, the State Council issued the “Air Pollution Prevention and Control Action Plan” (shorter form, the “Ten Rules of Qi”), which implemented comprehensive prevention and control measures, such as eliminating backward production facilities, setting emission limits for high-polluting industries, and implementing contract energy management for 47 cities in “three regions and 10 clusters”. With the central government’s subsequent promotion of the supervision system for environmental protection and air quality, air pollution control in relevant areas was strengthened to an unprecedented extent, and the “blue sky defense war” achieved remarkable progress. A paradox has emerged in households’ health capital investment, that is, households’ investment in smog avoidance is growing with the improvement of air quality. The smog avoidance investment mainly concerns the purchase of anti-smog masks and air purifiers. Anti-smog masks are used to reduce outdoor exposure, and air purifiers are aimed at reducing the concentration of indoor air pollutants. The sales of masks in China exceeded 5 billion pieces
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