Gaarder, Borghild Marie Moland; (2002) The distributional effects of illness and air pollution. Doctoral thesis (Ph.D), UCL (University College London).

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Abstract

This thesis explores the possible interactions of income and illness through labour supply and averting and mitigating behavioural choices, and the implications for health and health-cost measurements. In the first part, standard utility maximisation theory is used to analyse labour supply behaviour under constraints imposed by sickness and minimum consumption requirements. For a rather general utility function, an empirically supported elasticity of substitution between leisure and consumption, and under the assumption that no sick pay is received, we find that only higher-wage individuals will choose to recuperate fully, whereas others will work while being sick. Therefore, the income and welfare losses due to a given illness may be larger for low-wage individuals than for those with higher wages. The second part discusses the important role that income may play in the quantification and valuation of the health effects from air pollution. The level of income may affect the amount of averting and mitigating activities undertaken, and the willingness to pay to avoid an adverse health effect. The validity of the methods used to quantify and value the health impact of air pollution is therefore questioned. Furthermore, the effects of income and income-related personal characteristics may pose significant problems for the transferability of results between countries. In the final part a regression analysis is undertaken using the largest sample of air pollution mortality studies to date, from both developing and developed countries, in an attempt to further the understanding of the relationship between suspended particles and mortality. Applying empirical Bayes meta-analysis, it is estimated that mortality rates on average increase by 6 per cent per 100μg/m increase in Particulate Matter (PMio) concentrations, with greater effects in countries with high income inequality. We further find evidence that education and income have an influence on the effects of PM pollution. This thesis shows that the traditional models and measurements of illness and of the association between pollution and health can lead to distorted estimates of illness in general, and of the adverse health effects of air pollution, in particular, by neglecting the interaction between income and health.

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