Air Pollution and Medical Insurance: From a Health-Based Perspective

Using the China Health and Retirement Longitudinal Study (CHARLS), this paper quantifies the causal effects of air pollution on the demand for medical insurance. Results suggest that the rise in air pollution is associated with an increased probability of purchasing medical insurance. Furthermore, residents are more inclined to have basic medical and commercial insurance, rather than critical illness insurance. In addition, the evidence of two possible channels through which air pollution is related to purchasing insurance are found, including causing chronic diseases and depression. This study provides empirical evidence for China and other developing countries to improve the medical security system and promote the national health movement.