In recent decades, industrialization and urbanization have experienced rapid development, which has resulted in increasing air pollution. According to the World Bank, there is a close relationship between air pollution and public health. There is a positive relation between the concentration of air pollutants and respiratory diseases, lung function loss, chronic bronchitis and premature death (World Bank SEPA 2007). The evaluation of health-related economic loss caused by air pollution has become a hot topic for scholars and institutions.
Research progress on the economic loss regarding to public health impacts caused by air pollution
Ridker (1967) calculated the economic loss associated with different diseases which caused by air pollution in the USA in 1958 by using the human capital method. The results showed that the economic loss related to the effects on public health was 80.2 billion dollars in the USA. This study hailed the beginning of the calculation of health-related economic loss caused by air pollution.
Employing a survival analysis and the data from a 14- to 16-year mortality follow-up of 8111 adults in the six cities in the U.S., Dockery et al. (1993) estimated the associations between particulate air pollution and daily mortality rates. Their results confirmed that the mortality rate was associated with the level of air pollution. Using data from 1994 to 1995 in Hong Kong, Wong et al. (1999) determined that adverse health effects were evident at the current ambient concentrations of air pollutants. Samet et al. (2000) recognized an association between daily changes in the concentration of ambient particulate matter and the daily number of deaths (mortality) in the United States. Wong et al. (2002) used Poisson regression to estimate the associations between daily admissions and the levels of PM10 and SO2 in Hong Kong and London. The results confirmed that air pollution caused detrimental short-term health effects.
Using the collective data regarding to PM10 and SO2 from January 1999 to September 2000, Kaushik et al. (2006) assessed the ambient air quality status in the fast growing urban centres of Haryana state, India. Adopting the daily data during 2008 and 2009 in Beijing, Xu et al. (2014b) confirmed that short-term exposure to particulate air pollution was associated with increased ischemic heart disease (IHD) mortality.
In 1981, the concept, theory and method of environmental pollution economic loss assessment were put forward and discussed in the congress of the National Symposium on Environmental Economics (Xia 1998). Thereafter, the economic loss associated with environmental pollution was of interest to scholars. Gao et al. (1993) adopted the GEE (Generalized Estimation Equation) to study the relationship between TSP in Haidian District, Beijing and low air pollution. Using the two methods (ecology and time series) and the data of 1992 in Shenyang, Xu et al. (1996) determined that total mortality, chronic obstructive pulmonary disease (COPD), cardiovascular disease and pollution levels were significantly correlated. Jing and Ren (2000) conducted an epidemiological survey on adults who were older than 25 years using the multiple logistic regression analysis. The results showed that 6 types of respiratory system diseases or symptoms appeared with an increasing frequency as air pollution levels increased. Chen and Hong (2002) quantitatively evaluated the air pollution in Shanghai based on the risk evaluation method and found that the health effects caused by SO2 exhibited a gradually declining trend. Chen et al. (2010) evaluated the health impacts of particulate air pollution on urban populations in 113 Chinese cities, and it was estimated that the total economic cost of the health impact was approximately 341.4 billion Yuan, 87.79 % of which was attributable to premature deaths. Chen et al. (2015) employed a Poisson regression model to estimate residents’ health benefits in two scenarios: environmentally controlled scenario 1 and environmentally controlled scenario 2. Scenario 2 showed a potentially higher reduction of emissions and greater health benefits than scenario 1. Xu et al. (2014a) used the established model between PM10 and thermal environmental indicators to evaluate the PM10—related health risk in Beijing.
Certain scientific institutions also focused more on the economic loss associated with public health effects caused by air pollution. The World Health Organization estimated that the total loss globally caused by air pollution-related disease was 0.5 % (Murray and Lopea 1997) in 1997. In the same year, the World Bank systematically studied the health effects caused by air pollution in China (World Bank 1997). The U.S. Environmental Protection Agency estimated that the economic benefits of health and ecological improvement in the United States from 1990 to 2010 were as high as $6–50 trillion, most of which could be attributed to the decrease in the number of deaths caused by air pollution (U.S. EPA 1999). The World Health Organization reported that 80 % of the world’s cases of heart disease and stroke deaths were due to air pollution, and a total of 7 million people in the world died of air pollution in 2014 (Huanqiunet 2014). In 2015, the World Health Organization released data that at least 1 in every 8 people died of air pollution throughout the world. Air pollution has become the world’s largest environmental health risk (Huanqiunet 2015).
Research progress on the method used to evaluate the economic loss associated with public health effects caused by air pollution
The previous studies regarding to the economic loss caused by the effects of air pollution on public health generally included the determination of economic loss using the contents of the environmental pollution assessment, the public health impact assessment and a choice of methods. Generally, the methods used were as follows.
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Modified human capital method
Ridker (1967), Dockery et al. (1993), Wang et al. (2005), Jia et al. (2004), Wan et al. (2005), Han et al. (2006), Zhang et al. (2008), Shang et al. (2010), Han (2011), and Shen et al. (2014) quantitatively estimated the economic loss in different regions and obtained different results.
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Illness cost method
Air pollution led to changes in the disposable income of people, particularly, an increase in medical expenses. Medical expenses became a recognized fact, and they also became a very heavy burden on civilians. Based on the above views, certain scholars obtained conclusions by analysing the illness costs caused by air pollution. These scholars include Chen et al. (2010), Zmirou et al. (1999), Hedley et al. (2008), Patankar and Trivedi (2011), Brandt et al. (2014), and Yan (2012).
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Willingness to pay
Willingness to pay is an indirect evaluation method which constructs a simulated market to reveal people’s willingness to pay for certain environmental goods, in order to evaluate the value of environmental quality. Researchers included Carlsson and Martinsson (2001), Wang and John (2006), Koop and Tole (2004), Pascal et al. (2013), Yaduma et al. (2013), Ami et al. (2014), Istamto et al. (2014), Cai and Yang (2003), Peng and Tian (2003), Cai et al. (2007), Zhou et al. (2010), and Zeng et al. (2015).
Literature summary
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In the studies of the economic loss caused by air pollution, domestic and foreign researchers studied the qualitative relationship between and quantitative analysis of air pollution and its health effect. However, generally, previous studies were solely based on a country, a city or a type of air pollutant; the health effects of many types of air pollutants in a city of a typical city are moderate.
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Regarding to the method for evaluating the economic loss caused by the effects of air pollution on public health, the deficiencies of the modified human capital method were that the life prediction of the society may not be reasonable, and the different choices of the discount rate would have a large impact on the evaluation results. The disadvantage of the illness cost method is that it may underestimate the illness value. Additionally, the method’s other disadvantage was that the individual may have a willingness to pay.
From the economic perspective, the willingness to pay method is the most reasonable method because it can reveal the value of all goods and utilities, and it can completely evaluate the economic values of environmental resources, which is currently being widely recognized and accepted. Thus, this paper utilizes the willing to pay method to evaluate the economic loss associated with public health effects caused by air pollution in 74 cities.