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About the Speaker

Associate Professor at Beijing Normal University, Master supervisor. She obtained her PhD degree in Economics from Peking University in 2017.  Her research interests include Health Economics, Labor Economics, Environmental Economics, Development Economics.  She has published in Proceedings of the National Academy of Sciences of the United States of America (PNAS), Journal of Environmental Economics and Management, Journal of Population Economics and Health Economics etc. Her projects have been funded by the Youth Programme of National Natural Science Foundation of China (NSFC) and the China Postdoctoral Science Foundation. She was awarded 3rd prize in the 8th Edition Outstanding Scientific Research Award (Humanities and Social Science) of Higher Education Institution.

Abstract

This study offers one of the first causal evidence on the morbidity costs of fine particulates (PM2.5) for all age cohorts in a developing country, using individual-level healthcare spending data from the basic medical insurance program in Wuhan, China. We implement thermal inversion as an instrumental variable to address potential endogeneity in PM2.5 concentrations. Our analysis shows that PM2.5 has a significant impact on medical expenditures in both the short and long term. The instrumental variable estimate suggests that a 10 μg/m3 reduction in monthly average PM2.5 leads to a 2.79% decrease in the value of health spending and a 0.70% decline in the number of hospital visits and pharmacy purchases.The effect is more salient for males, children, and older adults. Moreover, our estimates provide a lower bound of people’s willingness-to-pay, which amounts to 51.85 Chinese yuan per capita per year for a 10 μg/m3 reduction in PM2.5.