Working Paper
Gold mining pollution and the cost of private healthcare

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, such as skin infections, upper and lower respiratory disorders, and cardiovascular diseases, 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. The empirical results confirm that, after controlling for factors such as current and long-term health status, increased mining pollution leads to higher healthcare expenditure.