Valuing the Benefit of Reducing Adverse Effects from Polluting Heating Fuels

Abstract

ObjectivesIndoor air pollution (IAP) from combustion‐generated pollutants, which are generated by solid fuel combustion for heating, has received considerable attention in recent years based on its health hazards for the human body. This article focuses on the health risk of heating fuel choice and estimates the health benefit (monetary benefits from medical expense savings) related to the improvement of the heating system.MethodsUsing the Kentucky Homeplace Program survey data and a health production function framework, this article explored the health implications of heating fuel choice by estimating the relationship between individuals’ use of polluting heating fuel and the number of medical services received annually.ResultsThe results show that using polluting heating increases doctor visits and medical expenses. Individuals may pay as much as about $135.99 for shifting from using polluting heating to nonpolluting heating.ConclusionsThe result provides some evidence to support the linkage between health risks and polluting heating use. Some demographic and lifestyle characteristics did have significant effects on medical care expenses. Government could consider subsidies to encourage lower income groups to shift to nonpolluting heating fuels or use improved technology in order to reduce the public insurance cost.