The impact of water pollution on health expenditures of residents:Evidence from urban sewage in China

Abstract

Controlling the negative externalities of environmental pollution and reducing living costs of residents have long been main societal concerns. With the ongoing deterioration of the ecological environment, understanding the relationship between urban sewage pollution and health expenditures of residents has become increasingly critical. Drawing on extensive theoretical analysis, this study employs data from 266 Chinese cities spanning the period from 2012 to 2022 to investigate the health cost effect of urban sewage pollution. The findings reveal that urban sewage pollution not only significantly increases health expenditures of local residents but also exerts a positive spatial spillover effect on the health expenditures of surrounding residents. Education, advanced industrial structure, medical insurance, and agricultural mechanization can linearly and negatively mitigate the impact of urban sewage pollution. The local and spatial moderating effect of economic development exhibit an inverted U-shape. Furthermore, advanced industrial structure, agricultural mechanization and highly coordinated river management systems with clear accountability effectively suppress the negative externalities associated with urban sewage pollution. This study, which provides a scientific basis for accurately assessing the health costs of urban sewage pollution, is conducive to building a "green defense line" for residents' health expenditures and facilitating the achievement of the Sustainable Development Goals of United Nations.