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Abstract
Airborne particulate matter suspended from industrial facilities, power plants, and automobiles is detrimental to health. Growing concerns about the increasing level of airborne particulate matter have led many industrialized nations to advocate for the transformation of the energy market and investment in sustainable energy products. At the other end, consumers have made individual adjustments and attempted to reduce the exposure to the particulate matter. In this paper, we focus on the effect of ambient air pollution on consumer expenditures based on scanner panel data on consumers’ debit and credit card transactions. A series of empirical analyses found robust evidence that the increased level of particulate matter led to considerable disruption in total consumer expenditures with significant heterogeneity across categories. Our findings suggest that consumers alter their spending behaviors in an attempt to reduce the risk of exposures to particulate matter. Such an estimated effect of air pollution is qualitatively different from those of other macroeconomic factors and provides important guidance for policy interventions and practical decisions aimed at sustaining economic growth.
Highlights
Airborne particulate matter suspended from industrial facilities, power plants, and automobiles is detrimental to health [1,2,3,4]
We addressed the economic effect of ambient air pollution
We found strong empirical evidence that consumers’ responses to the increased level of fine particulate matter differ considerably across categories
Summary
Airborne particulate matter suspended from industrial facilities, power plants, and automobiles is detrimental to health [1,2,3,4]. Ambient air pollution is closely associated with increased morbidity and mortality for multiple health indicators, including respiratory, cardiovascular, and chronic allergic diseases [5,6,7]. Exposures to PM with lower aerodynamic diameters, including fine and ultrafine PM, are related to general morbidity and mortality due to respiratory and cardiovascular diseases [11,12,13]. Particulate matter with an aerodynamic diameter of less than 2.5 and 10 micrometers are associated with serious adverse effects [19,20,21] Adverse effects of both short- and long-term exposures to an elevated concentration of pollutants can be exacerbated in vulnerable populations, including those with preexisting cardio-respiratory diseases and the elderly [8,22,23]. The population exposed to ambient air pollution exhibit decreased lung function and increased incidence of chronic cough [9,10,24,25]
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