Market and welfare valuation of the economic burden of diseases attributable to air pollution exposure in the Western Balkans

Abstract

Aim: The population in the Western Balkans is exposed to high air pollution concentrations, among the highest in Europe, causing death and disability. Research, however, on the resulting economic cost in the region is still limited. We estimate the economic cost of the adverse health effects from air pollution exposure, including fine particulate matter (ambient and household) and ambient ozone air pollution in the region.

Methods: We employ both market and welfare-oriented methods. According to the Cost-of-Illness (COI) approach, we estimate both the direct (healthcare expenditure) and indirect cost (mortality and morbidity cost). Against the shortcomings of a market-based valuation, the Willingness to Pay (WTP) approach is also used. The most recent data from the Global Burden of Disease Study 2019 are used.

Results: Under the COI approach, total economic cost is estimated at PPP$ 6.3 billion. Equivalently, it ranges from 0.8% of GDP in Croatia to 2.39% of GDP in Bosnia and Herzegovina. The WTP methodology yields a significantly higher estimate, equal to PPP$ 76.7 billion. The monetary amount associated with the disease burden of air pollution is significant.

Conclusion: Public health policies should include monitoring of the adverse health effects of air pollution. Abatement policies should aim at reducing ambient air pollution as well as the dependence on polluting household energy usage. The reduced economic cost can be accompanied by benefits associated with climate change mitigation and an overall improvement in population’s health status, an important aspect given the current COVID-19 pandemic.