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The effect of haze pollution on insurance development: Evidence from 268 prefecture-level cities in China

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  • Yonglian Chang
  • Yingjun Huang
  • Manman Li
  • Zhengmin Duan

Abstract

The relationship between haze pollution and insurance development is investigated based on the concentration of PM2.5 of 268 Chinese cities during 2009~2018. Subsequently, the effect of haze pollution on the development of insurance and the underlying mechanisms are also explored. The regional governance of haze pollution and its impact on insurance development is estimated by using a unified framework of two-stage least squares. The machine learning method-elastic network is adopted to filter the control variables and avoid multi-collinearity. The results show that haze pollution has an adverse effect on the insurance development through two important underlying mechanisms, residents’ emotions and economic development. Haze pollution affects residents’ emotions, and the impact coefficient is approximately equal to -0.18, which further inhibits residents’ participation in insurance. Moreover, pollution restricts residents’ budgets by hindering economic development, the impact coefficient is about -0.07, thus, the development of insurance is suppressed. These two negative effects exhibit regional variations, which gradually attenuate from eastern, western to the Chinese central region. The regional governance has a positive effect on haze pollution with the coefficient of -0.07, while impact coefficient of haze pollution on insurance development decreases to -0.02. The policy implication is that government supervision can formulate reasonable environmental and insurance policies based on the heterogeneity of regional development to alleviate haze pollution and promote insurance development.

Suggested Citation

  • Yonglian Chang & Yingjun Huang & Manman Li & Zhengmin Duan, 2022. "The effect of haze pollution on insurance development: Evidence from 268 prefecture-level cities in China," PLOS ONE, Public Library of Science, vol. 17(4), pages 1-18, April.
    • Handle: RePEc:plo:pone00:0267830
    DOI: 10.1371/journal.pone.0267830
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    References listed on IDEAS

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    1. Yonglian Chang & Yingjun Huang & Manman Li & Zhengmin Duan, 2021. "Threshold Effect in the Relationship between Environmental Regulations and Haze Pollution: Empirical Evidence from PSTR Estimation," IJERPH, MDPI, vol. 18(23), pages 1-19, November.
    2. W. Walker Hanlon, 2016. "Coal Smoke and the Costs of the Industrial Revolution," NBER Working Papers 22921, National Bureau of Economic Research, Inc.
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