The Pearl River Delta (PRD) in Southern China is a region where the manufacturing industry is rapidly developing, accounting for about 10% of the gross domestic product (GDP) with 4% of China’s population.
The economic development in this region is accompanied by severe air pollution that poses harm to people’s health and causes economic loss. This paper estimates the adverse health effects of particulate matter pollution in the PRD by using a loglinear exposure–response function, and monetizes the morbidity effect by using the cost of illness (COI) method and the mortality effects by using both the amended human capital (AHC) method and the results of contingent valuation (CV) study. The results show that in 2006 the total economic loss of the health effects from PM10 pollution in PRD is 29.21 billion Chinese yuan by using CV results and COI method, which is equivalent to 1.35% of the regional GDP, and is 15.51 billion Chinese yuan by using AHC and COI methods, which is equivalent to 0.72% of the regional GDP. The economic loss due to premature death and chronic respiratory disease accounts for more than 95% of the total loss. Despite the uncertainties, the results clearly show the severity of the health effects and economic loss incurred by particulate matter pollution in PRD; the results further point to the need for developing environmentally friendly industry, and provide a benchmark for comparing alternative options to reduce air pollution.
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