Yearly mean PM2.5 concentration levels in Beijing, New York and Los Angeles

Causal Impact

A 10 percent increase in the PM2.5 concentration will lead to a decrease of consumer activities by:

Rebound Effect

Patient people engage in intertemporal substitution and delay their leisure trips to days featuring better air quality. This behavioral response will lead to a rebound effect, such as a spike in leisure activities on the first blue sky day after several consecutive polluted days.

One additional "severely polluted" day is associated with:

Heterogeneous Effect

There is a larger increase in visits for higher‐quality restaurants during blue sky days. In particular, blue sky has a negative or little impact on visits to low‐quality restaurants.

The results show that the visits of Chinese cuisine restaurants are higher under excellent or good air quality, compared with foreign cuisine restaurants. 

The impact of blue sky on fast food restaurant reviews is relatively small compared with restaurants serving table meals.

Team

Siqi Zheng

MIT Sustainable Urbanization Lab, Department of Urban Studies and Planning, 

Center for Real Estate


Jianghao Wang
Chinese Academy of Sciences

Matthew Kahn

Johns Hopkins University and NBER

Cong Sun

Shanghai University of Economics and Finance

Publications

Sun, Cong, Siqi Zheng, Jianghao Wang, and Matthew E. Kahn. "Does Clean Air Increase the Demand for the Consumer City? Evidence from Beijing." Journal of Regional Science.


The material on this website can be used freely. We just ask that it is duly credited as a project by MIT Sustainable Urbanization Lab, and a PDF is sent to cfclab@mit.edu.

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