Clean Air and Consumer City

Does Clean Air Increase the Demand for the Consumer City? - Evidence from Beijing

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Consumer cities offer a variety of leisure opportunities. However, the gains from such consumer city leisure are likely to be lower on more polluted days. 

We study the association between daily consumption activity and outdoor air pollution in China and find evidence in favor of the hypothesis that clean air and leaving one's home for leisure trips are complements. 

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

Demand of the urban consumer city will increase when air pollution is lower.

Causal Impact

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

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This impact will also exacerbated on hot days - the magnitude is about 3-4 times larger for the same amount of the PM2.5 concentration level increase.

Kernel-based estimation of the semiparametric restaurant regression.

Rebound Effect

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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.

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One additional "severely polluted" day is associated with:

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Heterogeneous Effect

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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.

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

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

Team

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Siqi Zheng

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

Center for Real Estate

Jianghao Wang
Chinese Academy of Sciences

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Matthew Kahn

Johns Hopkins University and NBER

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Cong Sun

Shanghai University of Economics and Finance

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Publications

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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.