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Air pollution and defensive behavior: Evidence from transaction data in China

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  • Qingqing Yang
  • Xinping Dong

Abstract

This study presents empirical research about the defensive behavior of air pollution, that is, health insurance purchases. Using transaction-level data from a large insurance company, covering more than half a million insurance contracts from nineteen cities in China from 2014 to 2018, we empirically imply that an increase of 10% in AQI leads to a 0.37% uptick in the number of daily sales of health insurance contracts by the company within the city. The effect is non-linear and is more pronounced when the AQI exceeds 200. Besides, the defensive cost for a one-unit increase in AQI accounts for around 1.70% of individual income annually. We demonstrate that the positive impact of air pollution on health insurance purchases is primarily driven by health management awareness and social interaction.

Suggested Citation

  • Qingqing Yang & Xinping Dong, 2024. "Air pollution and defensive behavior: Evidence from transaction data in China," PLOS ONE, Public Library of Science, vol. 19(11), pages 1-20, November.
    • Handle: RePEc:plo:pone00:0307295
    DOI: 10.1371/journal.pone.0307295
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    References listed on IDEAS

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    1. Cook, Nikolai & Heyes, Anthony, 2022. "Pollution pictures: Psychological exposure to pollution impacts worker productivity in a large-scale field experiment," Journal of Environmental Economics and Management, Elsevier, vol. 114(C).
    2. Joshua Graff Zivin & Matthew Neidell, 2012. "The Impact of Pollution on Worker Productivity," American Economic Review, American Economic Association, vol. 102(7), pages 3652-3673, December.
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