The present study is based on the remote opencast coal mining region of a mineral-rich Indian state, Odisha. Our estimation confirms our primary hypothesis that proximity to opencast mining, triggers the likelihood of respiratory illness (RI). Moreover, our investigation affirms the presence of selection bias possibly due to underreporting in the self-reported RI episodes.
We try to address the above causality through the pathways of both exogeneity and endogeneity of RI. After controlling for the endogeneity of RI episodes, it is evident that the effect of RI reporting on related health expenditure is grossly overestimated under the assumption of exogeneity. In the regressions, the variable of prime importance, that is, the distance from mine, treatment dummy and per capita income are statistically significant, indicating the high likelihood of RI episodes in closer proximity to the mining region, in the treatment villages over control villages. The positive significance of per capita income also supports the presence of selection bias possibly associated with self-reported RI episodes. Both estimation methods indicate that the proximity to the pollution source increases the health expenditure on RI. For treatment villages, a higher distance to healthcare facilities reduces health expenditure. The pollution load and healthcare inaccessibility are implicated through a latent burden of disease which warrants a serious policy intervention towards partial correction of the externalities for achieving sustainable and equitable development.
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