Extreme temperatures and out-of-pocket medical expenditure: Evidence from China

We estimate the causal effect of extreme temperatures on out-of-pocket medical expenditure. To do so we match data from three waves of China Family Panel Studies, a nationally representative longitudinal survey for China, with daily weather records in the county in which the person lives. We find that both extreme cold and extreme heat increase expenditure and that the effect of hot days on out-of-pocket medical expenditure is collectively larger than that of cold days. Extreme temperatures increase time engaged in sedentary activities and contribute to sleep disruption and energy poverty, which adversely affect physical and mental health. Combining our preferred estimates with daily temperature projections from recent climate models, we find that out-of-pocket medical expenditure would increase by 2.290-6.149% in the medium term (2041-2060), depending on whether measures are taken to curb greenhouse gas emissions. Our study highlights a growing, but previously neglected, burden stemming from climate change.