Does pollution-intensive industrial agglomeration increase residents' health expenditure?

Abstract Pollution-intensive industrial agglomeration has become a trend of industrial distribution in China. Does pollution-intensive industrial agglomeration significantly increase residents’ health expenditure? By clarifying the environmental effect, economic effect and public service effect of pollution-intensive industrial agglomeration on residents’ health expenditure, this paper combined with provincial data to prove the environmental effect, economic effect and public service effect. The results show that: (1) Every 1 % increase in pollution-intensive industries will reduce rural residents’ health expenditure by 1.1844 % and increase the health expenditure of urban residents by 1.206 %. (2) The pollution-intensive industrial agglomeration increases the health expenditure by expanding the scale of pollution, reduces the health expenditure by promoting the technological innovation. (3) Pollution-intensive industrial agglomeration increases the health expenditure by enhancing residents’ income and reduces the health expenditure by enhancing employment rate. (4) Pollution-intensive industrial agglomeration increases the health expenditure by improving medical services and reduces the residents’ health expenditure by promoting the construction of environmental infrastructure. (5) There are a single threshold and a double threshold effects of pollution-intensive industrial agglomeration on health expenditure of rural residents and urban residents, respectively. When the location entropy is higher than 0.4669, the pollution-intensive industrial agglomeration can reduce residents’ health expenditure. When the location entropy is less than 0.9861 or greater than 1.027, the pollution-intensive industrial agglomeration increases urban residents’ health expenditure. The conclusion of this paper is of great significance in adjusting the distribution of pollution-intensive industries and increasing the health expenditure of residents.