CNN has just published a good piece where I am quoted about pollution exposure inequality in China. My research on this topic can be found here and here and here. Consider a large number of people who differ with respect to their income levels. This income can be spent on various consumption and investment goods. Consumption goods include cell phones, ice cream, sneakers etc. Investment goods includes stocks, bonds,doctors visits, dentist visits, paying USC's tuition. These investment goods payoff a future rate of return either by generating future income or by raising your human capital and health capital so that you can be a more productive worker in the future.
The key point I want to note here is that some of these investment goods are "lumpy". You can't purchase 1/20th of a car. You either buy a car or not and there is some fixed cost for buying it that poorer people can't afford.
I raise this issues because this "micro-foundation" explains why pollution exposure inequality is rising in China. Pollution varies even within Beijing and the less polluted parts of the city feature higher home prices. If you can't afford a car (which people drive on more polluted days to avoid an outdoor commute), if you can't afford vacations away from your polluted city, if you can't afford a home air filter, if you can't afford access to good doctors and better foods, your health will suffer from the pollution. For those who can't afford these lumpy self protection strategies, they will be exposed to more pollution and will suffer more from it than richer households.
In this blog post, I haven't even mentioned inequality across generations as young people cannot afford to buy apartments and older apartment owners are rich. I haven't mentioned spatial inequality in that those with Hukoo for Shanghai and Beijing face easier admissions standards for leading universities than those with kids who don't have these domestic passports.