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

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.