Targeted environmental policy and public welfare: Evidence from fireworks deregulation in China

Targeted environmental policies are vital for balancing ecological sustainability and socio-cultural practices. With rising public appeals for traditional customs, governments are reassessing the rationale for fireworks regulation as an anti-pollution measure. This study evaluates fireworks deregulation in specific districts and counties in China, analyzing its impacts on air pollution and public benefits. We find that fireworks deregulation significantly impairs air quality, although the decline remains within acceptable limits. Specifically, the average AQI meets government standards before and after deregulation, and pollution mainly occurs during holidays, in areas with high initial population density, high baseline pollution level, and in eastern regions. Further analysis shows that deregulation enhances subjective well-being and employment, and the quantified benefits at least offset the increased health expenditures. Overall, fireworks deregulation involves environmental costs but also generates meaningful social benefits. Our study offers insights to help targeted environmental governance balance ecological sustainability and traditional cultural preservation.