Search

Begin New Search Topic Air Pollution Political Geography China

1. The value of air quality in Chinese cities: Evidence from labor and property market outcomes

Author:
Xuan Huang and Bruno Lanz
Publication Date:
11-2015
Content Type:
Working Paper
Institution:
Centre for International Environmental Studies, The Graduate Institute (IHEID)
Abstract:
Using a dual-market sorting model of workers’ location decisions, this paper studies the capitalization of air pollution in wages and property prices across Chinese cities. We exploit quasi-experimental variations in particulate matter (PM10) concentration induced by a policy subsidizing coal-based winter heating in northern China, specifying a regression discontinuity design based on cities’ location relative to the policy boundary. We estimate that the elasticity of wages and house prices with respect to PM10 concentration is 0.41 and -0.71 respectively. Our results are robust to the use of an alternative source of exogenous variation in PM10 concentration (sandstorms), supporting the view that the local effect we measure provides policy-relevant information on the value of air quality improvements in China.
Topic:
Housing, Labor Market, Air Pollution, and Public Goods
Political Geography:
China and Asia

2. Air pollution in urban Beijing: the role of government-controlled information

Author:
Chiara Ravetti, Yana Popp Jin, Mu Quan, Zhang Shiqiu, and Tim Swanson
Publication Date:
08-2014
Content Type:
Working Paper
Institution:
Centre for International Environmental Studies, The Graduate Institute (IHEID)
Abstract:
This paper looks at the problem of information control behind the unsustainable levels of air pollution in China. In particular, it focuses on a large urban area, Beijing, and it examines the role of the public, government-controlled information and the adaptation choices of households in response to signals about high pollution. Our analysis is based on a simple theoretical framework in which people migrate from rural areas to polluted cities, receiving a signal from the government about urban pollution; hence, they decide whether to adapt to pollution or not. We find that the government has no incentive to ensure sustainable air quality, as it can distort pollution information in order to attract cheap labour. We then analyse empirically two different air pollution indexes from different sources and agents’ behaviour in an original household survey collected in Beijing. We find that the official air pollution values are systematically distorted, creating perverse incentives for households to react to bad air quality, especially for people who rely on government-controlled sources of information.
Topic:
Government, Sustainability, Air Pollution, and Information
Political Geography:
China and Asia