The effects of home heating on asthma: evidence from New Zealand

Abstract

New Zealand, along with the USA and Australia, has one of the highest asthma rates among developed countries and previous analyses attribute this partly to insufficient home heating in certain neighbourhoods. International public health and medical studies corroborate this link but strong evidence of causality is lacking. In this paper, we empirically investigate the effect of home heating on hospital asthma admissions using panel data techniques and controlling for endogeneity. The hypothesis that higher electricity prices (via less adequate heating) increase hospital asthma admissions is tested and receives strong empirical support across a number of model specifications and datasets used.

Keywords:

• asthma
• home heating
• electricity price

Acknowledgement

We would like to thank Sam Thornton and Paul Hunt from the Ministry of Economic Development, Lana Stockman from the Electricity Commission, Chris Lewis from the New Zealand Health Information Service and Jane Perrott from the Ministry of Health for providing data, with special thanks to Sam Thornton for providing useful advice. We would also like to thank Steve Stillman, Karen Conway, and the faculty of the Department of Economics and Finance at the University of Canterbury, particularly Bob Reed, Susmita Roy, and Seamus Hogan for providing helpful comments.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. For example, we find that reporting that dampness is a major problem with the house decreases the likelihood of reporting excellent health by about 5% and reporting a ‘too cold’ house decreases it by 4%, ceteris paribus.

2. Unfortunately, data on actual home heating is only available for the two Census years in our period and lacks any other time variation. Given the aggregated nature of our dataset, we could only use 20 regional observations in 2001 and 14 in 2006. This hinders any reliable instrumental variable estimation. Therefore, we rely on a reduced form approach in our analysis.

3. Between 2001 and 2010, New Zealand was administratively divided into 21 DHBs, each covering between around 30,000 (West Coast) and 450,000 (Waitemata) people. The average DHB population in 2001 was 185,000.

4. That said, Māori generally have higher avoidable and ambulatory-sensitive hospitalization rates than non-Māori (NZ Ministry of Health, 2010). This may partly be due to nonfinancial barriers in primary care access and likely contributes to the higher asthma admission rates observed among Māori in our data. If Māori are less likely to manage health conditions themselves or to use primary care, all else equal, we would expect their hospital asthma admissions to be more elastic with respect to electricity prices. However, we are unable to confirm this hypothesis in our analysis below (see Table 2). This may be due to lower utilization of electric heating among Māori and warrants a future investigation.

5. As this data was only available up to 2008, we have assigned 2008 population estimates to observations from 2009.

6. Most DHBs are matched very closely to one or more line businesses but there are a couple that do not fit perfectly. This is especially evident on the Lakes/Waikato border and the Southland/West Coast border. However, this should not be a cause of concern because the area of difference is very sparsely populated and given that the electricity price data is only an estimate, the loss in accuracy due to a different border definition is trivial.

7. This data contains the number of ICPs per retailer for each Network Supply Point (NSP). As each line business controls several NSPs, we have summed the number of ICPs per NSP to each line business.

8. For the purposes of regional CPI calculations, NZ is only separated into the three main cities (Auckland, Wellington and Christchurch) and the rest of the North and South Islands and estimates are only available from the second quarter of 2006. This makes regional CPI estimates of little use in our study.

9. A majority of the electricity produced at Lake Manapouri is, however, used directly by the Tiwai Point aluminium smelter rather than released into the national grid.