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Air Pollution's Grip: Drug Cost and Its Heterogeneity in China

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  • Ju, Heng
  • Tang, Yao
  • Zhang, Meilan

Abstract

We quantify the economic costs of air pollution associated with drug expenditures. First, following a 1% increase in the annual average of PM2.5, the combined expenditures on respiratory, cardiovascular, and antitumor drugs are predicted to rise by an amount equivalent to 1.81% of the annual per capita drug expenditure. Second, we compare expenditures on Western Medicine (WM) and Chinese Herbal Medicine (CHM), noting that research on the latter is significantly limited. After a rise in PM2.5 levels, the responsiveness and increase in expenditures for CHM drugs are similar to those for WM drugs, highlighting CHM's significance in understanding the economic impacts of air pollution. Third, cities with higher socioeconomic status—indicated by greater per capita fiscal revenue, higher disposable income, and a larger proportion of college graduates—exhibit a greater response in drug expenditures to air pollution.

Suggested Citation

  • Ju, Heng & Tang, Yao & Zhang, Meilan, 2024. "Air Pollution's Grip: Drug Cost and Its Heterogeneity in China," MPRA Paper 121154, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:121154
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    More about this item

    Keywords

    outdoor air pollution; drug expenditure; Chinese herbal medicine; disparities in drug expenditure;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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