Gold-Mining Pollution Exposure, Health Effects and Private Healthcare Expenditure in Tanzania

This article examines an important externality that polluting industries may impose on peoples’ health in their proximities. To ascertain the actual health outcomes and expenditure associated with mining pollution, this study (on a gold mine in Tanzania) used the Coarsened Exact Matching (CEM) approach, which matches the social, economic, and environmental risk-factor characteristics of households in treated and control groups. It also used a linear and logistics regression using CEM Weight to obtain robust treatment effects. The results show that health outcomes (proxied by stunting rate) were significant within 10km of the nearby mine. The probability of a child in the treated group being stunted was 0.226 greater than for a child with similar social, economic, and environmental risk factors in the control group. Moreover, the OLS regression suggested similarly that the children in the treated group had height-for-age Z-scores (HAZ06) of 0.827 less than for similar children in the control group. Further regression of HAZ06 on the distance from the mine provided robust evidence that health scores (HAZ06) among children increased statistically by 0.0212 for every kilometre they were further away from the mining site. These findings suggest that the less a person is exposed to mining pollutions (i.e., the further from the mine), the less the health impact. Furthermore, the results showed that households within 10 km of the mine are spending 55 202 Tanzanian shillings (TZS) more on health per person per year than those further than 10km away. The regression of per-capita health expenditure on distance provides more evidence that healthcare expenditure per capita decreases by TZS 712 for every 1km increase in the average distance from the residence to the mining site. Drawing intuition from the hedonic theory, we further interpreted the results in terms of ‘willingness to accept' (WTA); it was found that on average, the households staying within 10km of the mine (i.e., the victims of mining pollution) are willing to accept (WTA) minimum per-capita compensation for health expenditure of TZS 55 202 per annum (equivalent to USD 24.75). The minimum WTA increases closer to the mine site and decreases further away. These findings have an important implication for environmental and industrial policies. They suggest environmental regulations should be tightened, to ensure that the pollution emitted by mines is within acceptable limits for health as laid down by the WHO. Moreover, there is a need for a thorough review of industrial policies (especially in terms of local content) to ensure that compensation policies and local multiplier effects are adequate to offset the negative health and income effects.