NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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From Fog to Smog: the Value of Pollution Information

Panle Jia Barwick, Shanjun Li, Liguo Lin, Eric Zou

NBER Working Paper No. 26541
Issued in December 2019, Revised in May 2020
NBER Program(s):Environment and Energy Economics, Health Economics, Industrial Organization

During 2013-2014, China launched a nationwide, real-time air quality monitoring and disclosure program, a watershed moment in the history of its environmental regulations. We present the first empirical analysis of this natural experiment by exploiting its staggered implementation across cities. The program has transformed the landscape of China’s environmental protection, substantially expanded public access to pollution information, and dramatically increased households’ awareness about pollution issues. These transformations, in turn, triggered a cascade of household behavioral changes, including increases in online searches for pollution-related topics, adjustments in day-to-day consumption patterns to avoid pollution exposure, and higher willingness to pay for housing in less polluted areas. As a result of both short- and long-term behavioral changes, the program significantly reduced the mortality impact of air pollution. Conservative estimates suggest that health benefits are at least one order of magnitude larger than the costs of the program and associated avoidance behaviors combined. Our findings highlight considerable benefits from improving access to pollution information in developing countries, many of which are experiencing the world’s worst air pollution but do not systematically collect or disseminate pollution information.

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Document Object Identifier (DOI): 10.3386/w26541

 
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