Panle Jia Barwick, Associate Professor of Economics, Cornell University
This paper presents the first empirical analysis of the impact of a large-scale pollution monitoring and disclosure program on a range of household behavior and health outcomes. During 2013–2014, China launched a nation-wide, real-time air quality monitoring and disclosure program, the first-of-its-kind in its history. Exploiting this natural experiment and its staggered introduction across cities, we show that providing real-time air pollution information can be a powerful tool for inducing consumer behavioral changes to mitigate pollution impacts. Household activities such as online searches, day-to-day shopping, and housing demand are much more responsive to pollution when information becomes widely available. The information program reduces air pollution’s mortality cost by nearly 7%, amounting to an annual benefit of RMB 120 billion, an order of magnitude larger than the cost of the program itself and avoidance behavior. Our findings highlight large benefits from improving access to pollution information in developing countries, many of which are experiencing the world’s worst air pollution but lack basic information infrastructure.