The health risk of heating fuel choice and the economic value of related improvement

Indoor Air Pollution from solid fuels combustion when cooking and hearing bring out a significant public health hazard in both developed and developing countries. Most of the existing studies addressing this issue focus on developing countries, and on exposure when cooking rather than heating. Moreover, there has been little research addressing potential health hazards associated with combustion appliances and valuing the health benefits of related pollution reduction.;Using the Kentucky Homeplace Program survey data, this research makes some contribution to close the gaps mentioned above. The central theme of this dissertation is to explore the health risk of heating fuel choice and estimate the health benefit (monetary benefits from medical expenses saving) related to the heating system improvement.;Given the simultaneity from averting activity between heating fuel choice and prevalence of asthma and allergy, we obtain the instrumental variable (IV) estimates for Logit models through the Generalized Method of Moments (GMM). After correcting for simultaneity bias (excluding the effect of averting activity), we do not find strong evidence supporting the causal relationship between polluting heating fuel using and the prevalence of asthma, allergy, and other respiratory disease. Some demographic and lifestyle characteristics do have significant effects on the prevalence of these diseases.;Based on the health production function framework outlined by Gerking and Stanley (1986), a count data model was developed to estimate the relationship between polluting heating option and the number of medical services received annually. The results showed that polluting heating users received more medical services annually and thus spent more on medical expenses. This result may supports the higher health risk associated with the polluting heating using from a different perspective. Individual's willingness to pay (WTP) for heating system improvement can be estimated based on the result.;In terms of policy implication, the government should help consumers make more careful decisions to reduce the potential health hazards. Attention should be given to some new energy sources for heating.;KEYWORDS: Indoor Air Pollution, Heating Fuel Choice, Health Risk, GMM-IV Estimation, Health Production Function.