Alive but not well: The neglected cost of air pollution.

ABSTRACT

Besides medical expenses, hospitalizations associated with air pollution will incur the welfare loss due to activity restrictions and the wage loss due to inability to work. We fill in the gap in the literature by examining the impact of air pollution on volume and intensity of hospitalizations, which allows us to incorporate the welfare loss and the wage loss. Using a data set that covers most of the inpatients in a major Chinese city during 2015-16, we find that worse air quality causes more hospital admissions, more total inpatient days, and higher total inpatient expenditure for various diseases, particularly diseases of the respiratory and circulatory systems. We also find that there would be an underestimate of the loss from air pollution if we had ignored the loss associated with activity restrictions and the wage loss during hospitalization.