Avoid the outdoors on polluted days? Evidence from China

Abstract

ABSTRACT In this paper, we investigate the impacts of air pollution on overall outdoor activities in China. To address the shortcomings of previous studies, which mainly focused on specific outdoor activities, we provide new evidence of people’s avoidance behaviours on polluted days by using road traffic flow as a proxy for overall outdoor activities. Based on a novel daily road traffic flow data covering four major cities in China in 2018, we find that an increase of 100 points in air quality index (AQI) lead to a reduction in road traffic flow by approximately 0.9%. To overcome potential issues of endogeneity problems, we introduce an instrumental variable based on the AQI of surrounding cities weighted by distance and wind direction. A variety of robustness checks validate the causal interpretation of our findings, and further analysis provides richer characterizations of people’s self-protective avoidance behavioural response to air pollution. Our findings are highly valuable for policy-making and provide practical implications to public transport operators.