Does mandatory air quality information disclosure raise happiness? Evidence from China

Abstract

To combat pollution, the Chinese government has taken a series of environmental regulations, including requiring cities to report their daily air quality information. This has affected not only the environmental performance of governments and enterprises but also individual happiness. This paper attempts to explore whether and how mandatory air quality information disclosure affects happiness in China, using a difference-in-differences (DID) approach across cities for the waves 2007, 2008 and 2013. Empirical results show that in Chinese cities, people feel less happy over time although there is an increase in GDP per capita. Moreover, it is found that mandatory air pollution index (API) disclosure exerts a significantly positive impact on happiness, mainly by reducing air pollution. Our analysis has policy implications that for developing countries, air quality information disclosure should be encouraged since it is effective in combating air pollution resulting from high economic development and meanwhile it adds to individual happiness. • This paper examines the impact of mandatory air quality information disclosure on individual happiness, using a difference-in-differences (DID) model across China's cities for the waves 2007, 2008 and 2013. • People feel happier in cities with API disclosure than those in cities without API disclosure. Meanwhile, happiness level in high SO 2 pollution cities is also higher than in cities with low SO 2 emission. • API disclosure positively and significantly responds to individual happiness, especially in cities with low SO 2 pollution. • API disclosure influences individual happiness by increasing environmental transparency and by reducing air pollution. • Improving environmental transparency can be used as a means to reduce pollution and to promote the public's subjective well-being, especially in developing countries.