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Health, Behavior and Environmental Policy

Paper Session

Friday, Jan. 7, 2022 10:00 AM - 12:00 PM (EST)

Hosted By: Chinese Economists Society
  • Chair: Rui Du, Oklahoma State University

The Health Consequence of Rising Housing Prices in China

Yuanwei Xu
,
University of Muenster
Feicheng Wang
,
University of Goettingen

Abstract

This paper examines the health consequence of rising housing prices by exploiting spatial and temporal variation in housing price appreciation linked to individual-level health data in China from 2000 to 2011. Using an instrumental variable approach, we find robust evidence that increases in housing prices significantly raise the probability of residents having chronic diseases. This negative health impact is more pronounced among individuals from low-income families and rural to urban migrants. Exploring various possible channels, we find that marriage culture and marriage market competition exacerbates the negative health effects, particularly for males and parents with young adult sons. Our results also reveal that housing price appreciation induces negative health consequences through increased work intensity, higher mental stress, and changes in lifestyle. This paper underlines the unintended health consequences of the real estate market prosperity.

Behavioral and Distributional Implications of Air Pollution Information on Urbanites’ Outdoor Physical Exercise

Yichun Fan
,
Massachusetts Institute of Technology
Siqi Zheng
,
Massachusetts Institute of Technology

Abstract

Air pollution is one of the most significant public health hazards worldwide. Governments usually advise citizens to reduce outdoor activities when ambient air pollution is high through publicizing air quality index (AQI) and pollution avoidance guidance. Despite the wide adoption of such information policy worldwide, there is limited causal evidence of how urbanites’ engagement in outdoor activities changes in response to air pollution, as well as the distributional impacts across socio-economic groups. To fill in this gap, the key research questions asked by this research are: (1) How do people adjust outdoor physical exercise in response to information about ambient air quality? (2) How do the effects of pollution information on physical exercise vary by socio-economic status and why?
To answer these questions, we built a unique panel dataset using 22.4 million outdoor exercise records from smartphone App to track exercise activities of people all over China. The primary data are obtained from KEEP (https://www.gotokeep.com/), the most popular exercise App in China, from 2017-01-01 to 2017-12-31. This exercise dataset tracks individuals over time and has rich individual characteristics including location, age, gender, weight and exercise history. We coupled this data with hourly meteorological and pollution data from thousands of monitoring stations all over China.
To properly identify causal effects, we develop an instrumental variable (IV) based on daily variation in wind directions and air pollution levels of upwind cities, which is more exogenous to local activities. Based on IV analysis, we show that a 10 μg/m3 increase in ambient PM2.5 concentration reduces the proportion of people doing outdoor exercise by 1.31%. In addition, we use regression discontinuity design (RDD) to test threshold effects and find that people respond to air quality index discontinuous around the “heavy pollution” threshold, suggesting that public pollution information plays a role in guiding avoidance behaviors.

Respondent Experience and Willingness-to-Pay: Reconciling Stated Preference Data with Scientific Evidence

Zhenyu Yao
,
Virginia Tech
Klaus Moeltner
,
Virginia Tech
Bryan Parthum
,
U.S. Environmental Protection Agency and National Center for Environmental Economics

Abstract

Stated preference research to elicit respondents' values, or willingness-to-pay (WTP), to avoid or mitigate a detrimental environmental outcome or change often collects information on past experience with the adverse event in the underlying survey. Examples include power outages, goods, water or food contamination, and poor air quality. Traditionally, this information on past experience is then incorporated into a given Random Utility Model (RUM) used for welfare estimation as an explanatory modifier of WTP. The quality or accuracy of these measurements of "past experience" has, to date, been given limited attention. This study presents a unique opportunity to validate stated experiences by Florida Gulf coast residents with red tide-related air toxins with satellite imagery on algal blooms, as well as field data on respiratory irritation at local beaches. This data has been routinely collected for years in that region and is readily available to the public. We illustrate how this ancillary scientific information can be efficiently combined with choice experimental data and used to sharpen welfare estimates for a proposed red tide air quality forecasting system. Looking further, we consider this research a first step in a broader effort to directly link scientific data on environmental conditions with nonmarket economic outcomes.

Who Benefits from Water Quality Control? The Unequal Impacts of Environmental Regulation on Housing Wealth and Consumption

Rui Du
,
Oklahoma State University
Weizeng Sun
,
Central University of Finance and Economics
Hao Suo
,
Central University of Finance and Economics

Abstract

This paper examines the unequal effects of water quality regulations on household housing wealth and consumption. Using the data from China’s water quality monitoring system, we check for structural changes in the water quality of rivers between 2007 and 2018. Exploiting the established structural breaks, we find that a 10 mg/L decrease in the chemical oxygen demand (COD) leads to a 0.9% house price appreciation for the properties in proximity to rivers. Using a nationally representative household survey, we further show that the benefits from housing price premiums are concentrated in homeowners in light of a rising consumption level among homeowners living close to rivers with improved water quality. This paper calls for using land value capture mechanisms to recover the benefits from public investments and reduce the existing economic inequality.
Discussant(s)
Yuanwei Xu
,
University of Muenster
Yichun Fan
,
Massachusetts Institute of Technology
Zhenyu Yao
,
Virginia Tech
Rui Du
,
Oklahoma State University
JEL Classifications
  • I1 - Health
  • D9 - Micro-Based Behavioral Economics