Information disclosure and property value in China

This study examines the impact of air quality information disclosure on property values through the establishment of air quality monitoring stations under the “War on Air Pollution” initiative in China. This initiative aims to mitigate the adverse effects of air pollution by enhancing the accessibility, authenticity, and real-time air quality information. Our difference-in-difference model suggests that the air quality information disclosure leads to a 0.61% increase in surrounding property values based on the home transactions from 2012 to 2022. We confirm housing price capitalization arises from air quality disclosure and verify two underlying mechanisms of information scarcity and information accessibility. Moreover, we find that proactive government environmental initiatives, economic development, and population density enhance the positive effects of air quality information disclosure. The average welfare gain in property value is $2256 per home. Our findings contribute to the understanding of air quality information disclosure efforts and offer insights for environmental policy decisions.