Indirect Economic Impact Incurred by Haze Pollution: An Econometric and Input–Output Joint Model

Abstract

Econometrics and input–output models have been presented to construct a joint model (i.e., an EC + IO model) in the paper, which is characterized by incorporating the uncertainty of the real economy with the detailed departmental classification structure, as well as adding recovery period variables in the joint model to make the model dynamic. By designing and implementing a static model, it is estimated that the indirect economic loss for the transportation sector caused by representative haze pollution of Beijing in 2013 was 23.7 million yuan. The industrial-related indirect losses due to the direct economic losses incurred by haze pollution reached 102 million yuan. With the constructed dynamic model, the cumulative economic losses for the industrial sectors have been calculated for the recovery periods of different durations. The results show that: (1) the longer the period that an industrial department returns to normal output after haze pollution has impacted, the greater the cumulative economic loss will be; (2) when the recovery period is one year, the cumulative economic loss value computed by the dynamic EC + IO model is much smaller than the loss value obtained by the static EC + IO model; (3) the recovery curves of industrial sectors show that the recovery rate at the early stage is fast, while it is slow afterwards. Therefore, the governance work after the occurrence of haze pollution should be launched as soon as possible. This study provides a theoretical basis for evaluating the indirect economic losses of haze pollution and demonstrates the value of popularization and application.