1. Pricing for the clean air: Evidence from Chinese housing market.
- Author
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Chen, Shiyi and Jin, Hao
- Subjects
- *
HOUSING market , *AIR pollution , *HOME prices , *HEALTH risk assessment , *VENTILATION - Abstract
Abstract Air pollution is widely believed to cause healthy risks and influence nations' economic dimensions. This paper investigates the impact of air pollution on housing prices in China's 286 prefectural-level cities during 2005–2013. To address the endogeneity problem of PM 2.5 concentrations in our regression, we propose an instrument variable strategy based on ventilation coefficient. The estimation results suggest that a 10% increase in PM 2.5 concentrations causes a 2.4% reduction in local housing prices. Air pollution also hinders the progress of urbanization, limits cities' human capital formation and changes people's expectations of housing prices that we interpret as three potential mechanisms behind our main findings. [ABSTRACT FROM AUTHOR]
- Published
- 2019
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