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The impact of environmental pollution on public health expenditure: dynamic panel analysis based on Chinese provincial data

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Abstract

In recent years, along with rapid economic growth, China’s environmental problems have become increasingly prominent. At the same time, the level of China’s pollution has been growing rapidly, which has caused huge damages to the residents’ health. In this regard, the public health expenditure ballooned as the environmental quality deteriorated in China. In this study, the effect of environmental pollution on residents’ health expenditure is empirically investigated by employing the first-order difference generalized method of moments (GMM) method to control for potential endogeneity. Using a panel data of Chinese provinces for the period of 1998–2015, this study found that the environmental pollution (represented by SO2 and soot emissions) would indeed lead to the increase in the medical expenses of Chinese residents. At the current stage of economic development, an increase in SO2 and soot emissions per capita would push up the public health expenditure per capita significantly. The estimation results are quite robust for different types of regression specifications and different combinations of control variables. Some social and economic variables such as public services and education may also have remarkable influences on residential medical expenses through different channels.

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Notes

  1. The data are taken from World Health Organization (WHO) 2010 Global Disease Burden Report (GBD). For more information, please refer to http://www.healthdata.org/policy-report/global-burden-disease-generating-evidence-guiding-policy.

  2. Currently, the mainland of China has 22 provinces, four centrally administered municipalities, and five autonomous regions. Because these entities are administratively equal, the term “province” is utilized throughout the paper. Tibet is excluded due to data unavailability.

  3. EKC is an empirical hypothesis that was originally raised by Grossman and Krueger (1991, 1995), which claimed that environmental quality would at first deteriorated and then improve along with economic growth. For a comprehensive literature reviewer of EKC related studies, one could refer to a recently published work of Stern (2017).

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Acknowledgements

The authors are very grateful to three anonymous reviewers and Editor-in-Chief Prof. Dr. Philippe Garrigues for their insightful comments that helped us sufficiently improve the quality of this paper. The usual disclaimer applies.

Funding

The authors acknowledge financial support from the National Natural Science Foundation of China (71761137001, 71403015, 71521002), the Beijing Natural Science Foundation (9162013), the key research program of the Beijing Social Science Foundation (17JDYJA009), the National Key Research and Development Program of China (2016YFA0602801, 2016YFA0602603), and the Joint Development Program of the Beijing Municipal Commission of Education.

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Author notes

  1. Yu Hao, Shuang Liu, and Zhi-Nan Lu contributed equally to this study and share first authorship.

Authors and Affiliations

  1. Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing, 100081, China

    Yu Hao

  2. School of Management and Economics, Beijing Institute of Technology, Beijing, 100081, China

    Yu Hao, Shuang Liu & Mingyuan Zhao

  3. Sustainable Development Research Institute for Economy and Society of Beijing, Beijing, 100081, China

    Yu Hao

  4. Collaborative Innovation Center of Electric Vehicles in Beijing, Beijing, 100081, China

    Yu Hao

  5. Beijing Key Lab of Energy Economics and Environmental Management, Beijing, 100081, China

    Yu Hao

  6. Thrombosis and Vascular Medicine Center, State Key Laboratory of Cardiovascular Disease, Fuwai Hospital, Chinese Academy of Medical Sciences and Peking Union Medical College, Beijing, 100037, China

    Zhi-Nan Lu

  7. Cardiology Department, Centro Hospitalar Conde de São Januário, Macao, 999078, China

    Zhi-Nan Lu

  8. School of Economics, Southwestern University of Finance and Economics, Chengdu, 611130, China

    Junbing Huang

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  1. Yu Hao
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  2. Shuang Liu
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Correspondence to Yu Hao or Zhi-Nan Lu.

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Responsible editor: Philippe Garrigues

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Hao, Y., Liu, S., Lu, ZN. et al. The impact of environmental pollution on public health expenditure: dynamic panel analysis based on Chinese provincial data. Environ Sci Pollut Res 25, 18853–18865 (2018). https://doi.org/10.1007/s11356-018-2095-y

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