Air Pollution, Health, and Avoidance Behavior: Evidence from South Korea

Using detailed data on the beneficiaries of the Korean National Health Insurance Service (c.2006-2015), this paper estimates the health effects of air pollution in South Korea while controlling for avoidance behaviors. In particular, we investigate changes in respiratory hospitalization rates due to increases in PM10 and O-3 concentrations. To address the endogeneity of air pollution, this paper applies the historical average concentration of air pollution, which includes rich information about the meteorological and geographical factors that affect regional air pollution levels, as an instrumental variable and compares the results with other count data models. We find that a 10 mu g/m(3) increase in PM10 and a 10 ppb increase in O-3 lead to an increase in daily respiratory hospital visits of up to 10.39% [95% confidence interval (CI) 4.04-16.80] and 10.93% (95% CI 9.23-12.63), resulting in additional health care costs of US$67 million and US$70 million, respectively. This paper also shows that the effects of PM10 and O-3 are elevated in highly populated cities, children, and patients without chronic respiratory diseases.