Atmospheric pollution as a factor of household expenditures on health, sport, and tourism. Results from the vector error correction model

Abstract

Introduction: o fully understand the benefits of environmental regulations it is important to quantitate the impact of atmospheric pollutions on economic growth, regional development and society. This work concentrate mainly onthe relations betweenair pollution andsociety in the context ofaveragehousehold income and expenditures.Material and methods:Thestudy examines the causal relationships between expenditures on health, sport, and tourism, household incomes and air pollution across selected polish voivodships in years 2004– 2019.A notable feature of this study is that it uses annual data disaggregated into quarterly data to obtain robust empirical results through avoiding a sample size problem.The study applies the vector error correction model (VECM) to analyze the long-term and short-term relationship between six variables, where PM2.5(particulate matters) andCO (carbon monoxide) represents atmospheric pollution andhousehold budget is represented by disposable income and expenditures on health, sport, and tourism.Results:Pollution cause direct and indirect pressure on economy, as well as on individual household budget. First, the empirical results shows that air pollution directly affects health, especially when the concentration of harmful dusts and aerosols in the air is high.Second, the air pollution influence the expenses on health indirectly, through the state of health, where the individuals are forced to make expenses to treat the disease caused by air pollution, or for the prevention of potential diseases caused by air pollution.Third, the air pollution also cause the pressure on sport expenses and tourism expenses of household. Conclusion:Atmospheric pollution can impact economic outcomes, as well the atmospheric pollution can be driven by economic activity on different levels of aggregation.Air quality is also an important factor for making decisions about leisure and recreation. Sport activity, as a way of spending free time, has positive effect on health. Physical activity alsoinfluencethe reduction of health expenditure in long term, butalso has a potential to increase the expenditures on sport and recreation.