The Health Penalty of Chinas RapidRapid urbanization could have positive and negative health effects, such that the net impact on population health is not obvious. It is, however, highly pertinent to the human welfare consequences of development. This paper uses community and individual level longitudinal data from the China Health and Nutrition Survey to estimate the net health impact of Chinas unprecedented urbanization. We construct an index of urban city from a broad set of community characteristics and define urbanization in terms of movements across the distribution of this index. We use difference-in-differences estimators to identify the treatment effect of urbanization on the self-assessed health of individuals. The results reveal important, and robust, negative causal effects of urbanization on health. Urbanization increases the probability of reporting fair or poor health by 5 to 15 percentage points, with a greater degree of urbanization having larger health effects. While people in more urbanized areas are, on average, in better health than their rural counterparts, the process of urbanization is damaging to health. Our measure of self-assessed health is highly correlated with subsequent mortality and the causal harmful effect of urbanization on health is confirmed using more objective (but also more specific) health indicators, such as physical impairments, disease symptoms and hypertension.Urbanization and economic development are intimately related (Williamson, 1988). There is no better example of this than China in recent decades, where a remarkable rate of economic growth has been accompanied by a process of urbanization that is unprecedented in human history, both in scale and in speed. The proportion of the Chinese population living in urban areas increased from only 20% in 1980, to 27% in 1990, and reached 43% in 2005 (NBS, 2006; World Bank 2006). By the middle of this century, the countrys urbanization rate has been forecast to reach 75% (Yusuf and Saich, 2008). In the space of just a few decades, China will complete the urbanization process that lasted hundreds of years in the West. The non-economic consequences of such rapid urbanization, including those for health, as well as more obviously for the environment, will determine the true welfare effects of development and the extent to which it is sustainable. The consequences for population health are not obvious. On the one hand, urban living offers improved access to modern medicine (particularly in China) and gains in income that can be invested in health. On the other, the health of city dwellers is threatened by air pollution, more sedentary and possibly more stressful work, social detachment, and Western, high-fat diets. This paper uses panel data from China covering the period 1991-2004 to estimate the net health impact of urbanization.On average, health outcomes are found to be better in urban parts of the developing world (Van de Poel et al, 2007; Zimmer et al, 2007). This apparent urban health advantage contrasts with the historical evidence of urban populations suffering poorer health in Western Europe prior to and during its period of industrialization (Rosen, 1958; Woods, 1985, 2003). The most likely explanation for this difference in the urban-rural health disparity over time and space is the marked decline in the prevalence of infectious diseases, in low-income as well as high-income countries (Riley, 2005), prompted, in large part, by public health measures built on the germ theory of disease (Preston, 1975, 1980; Cutler and Miller, 2005) and the introduction of effective medicines, antibiotics and vaccinations (Davis, 1956; Cutler et al, 2006; Soars, 2007). In the past, the opportunities for material gain offered by cities had to be weighed against the dangers of infection. Today, while cities of the developing world continue to pose risks to health, the immediate threat to life through infection has receded. However, the overcrowding and pollution that accompany urbanization, particularly on the scale and speed with which it has occurred in China, may impose an urban health penalty.During the last decades, Chinas environment has deteriorated significantly as rapid urbanization and industrialization generate enormous volumes of air and water pollutants (World Bank, 1997; Wang and Smith, 2000; Brajer and, 2003).1 As other developing countries, most notably India, China relies very heavily on coal as a source of energy, with the result that levels of airborne pollution in Chinese cities are many times greater than those found in most US and European cities (Pandey et al, 2006).2 A World Health Organization study has estimated that there are 300,000 premature deaths per year in Chinese cities attributable to outdoor air pollution (Cohen et al, 2004).3 Urbanization brings social and economic changes that can raise risk factors associated with chronic disease. Urban populations of middle-income countries a