Munich Personal RePEc Archive

The effects of Air Pollution on Health Status in Great Britain

Giovanis, Eleftherios and Ozdamar, Oznur (2014): The effects of Air Pollution on Health Status in Great Britain.

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This study explores the effects of air pollution on self-reported health status. Moreover, this study explores the willingness to pay for improving the air quality in UK. The estimates are based on data from the British Household Panel Survey (BHPS). The effects of air pollution on individuals’ health status are estimated and their monetary value is calculated. In particular, two main air pollutants are examined; ground-level ozone (O3) and carbon monoxide (CO). Moreover, various approaches are followed. The first approach refers to panel Fixed Effects regressions and specifically the Probit adapted Ordinary Least Squares (POLS) and the “Blow-Up and Cluster” (BUC) estimator. The second approach is the dynamic system Generalized Methods of Moments (GMM), while the last approach is the Generalized Ordered Probit with Random Effects model. The annual monetary values for ground level O3 range between £128-£149 for a drop of one unit, while the respective values for the CO range between £122-£141. In addition, the marginal willingness to pay (MWTP) for avoiding an inpatient day in hospital for a one unit reduction in pollution is £29. In the case where the fee of £20 per stay, proposed by a former Health minister in UK, will be implemented then the MWTP ranges between £530-£570. Based on the elective (planned) and non-elective (unplanned) inpatient stay cost per day which is £2,749 and is £2,197 respectively a 5 and 4 unit respectively decrease in air pollutants will lead to a MWTP equal to the inpatient day cost. Lastly, depending on the health status of the individual the MWTP for the number of General Practitioners (GP) ranges between £10-£60.

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