Environmental degradation has indirect relationship with economic activity of households by affecting their health. Diseases borne by environmental pollution result in loss of income, loss of working hours, low labor productivity and heavy expenditure on health by households. This research assessed the economic impact of environmental pollution on human health. It was a micro level study conducted in the district of Rawalpindi. For this purpose, primary data was collected through interview schedule by using simple random technique. The extent of relationship between pollution borne diseases and income loss, expenditure on health and working hours was estimated through ANCOVA regression model using mixture of quantitative and qualitative variables. Results revealed the fact that there is both water and air pollution in Rawalpindi. Pure drinking water is seldom available. People are widely suffering from pollution borne diseases. Due to incidence of pollution borne diseases like malaria, hepatitis and asthma; household’s expenditure increases significantly. Of three diseases malaria is less dangerous according to economic point of view, because its treatment takes fewer resources out of total expenditure, while asthma and hepatitis occupies a large share of household expenditure. Income of household’s did not show significant response towards diseases, this result is justified by the logic, as when any member of family gets ill, other members or he/she himself try to earn more to meet health expenditure. On the other hand, outbreaks of such diseases in a country transmit a great shock to GDP of that country, because Govt. has to allocate certain handsome amount of budget to deal with such serious health issues. Similarly, it was observed that working hours of labor are seriously affected by the incidence of such diseases. Moreover, an affected person’s productivity also differs significantly from those who are healthy. Pollution is a negative...
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