The Effects of Environmental Regulations on Medical Expenses: Evidence from China

Abstract

In this study, we examine the effects of a special period regulation (SPR), implemented in the Chang-Zhu-Tan (Changsha City, Zhuzhou City, and Xiangtan City; CZT) region, regarding medical expenses paid by the Urban and Rural Resident Basic Medical Insurance (URRBMI) and Urban Employee Basic Medical Insurance (UEBMI) programs, using a difference-in-differences (DID) design. We find that the SPR significantly reduces medical expenses in the CZT region, which appears to be driven by improved air quality. Furthermore, this regulation has a significantly negative and positive impact on medical expenses paid by the UURBMI and UEBMI, respectively. In summary, our results provide empirical evidence for the orderly implementation of command-and-control environmental regulation policies from the perspective of health benefits.