Gold Mining Pollution and the Cost of Private Healthcare: The Case of Ghana

Abstract

To attract greater levels of foreign direct investment into their gold-mining sectors, many mineral-rich countries in sub-Saharan Africa have been willing to overlook serious instances of mining company non-compliance with environmental standards. These lapses in regulatory oversight and enforcement have led to high levels of pollution in many mining communities. The likelihood is high that the risk of pollution-related sicknesses will necessitate increasingly high healthcare expenditures in affected communities. In this study, we propose and estimate a hedonic-type model that relates healthcare expenditure to the degree of residents' exposure to mining pollution using data obtained on gold mining in Ghana. This has been confirmed by our empirical results,with an elasticity coefficient of 0.12. Furthermore, while healthcare expenditure does not vary between males and females, younger household heads spend more on their health than their older counterparts after controlling for health status, income and access to health insurance.