IDEAS home Printed from https://ideas.repec.org/a/taf/nzecpp/v55y2021i1p52-65.html
   My bibliography  Save this article

Effects of air quality on house prices: evidence from China’s Huai River Policy

Author

Listed:
  • Xinghua Liu
  • Qiang Li
  • Satish Chand
  • Keiran Sharpe

Abstract

We employ a regression discontinuity (RD) design to estimate the impact of air pollution on house prices across a river that demarcates regions with and without coal-fired heating resulting from the Huai River Policy. This policy was decreed by the Chinese government in the 1950s and mandated the burning of coal for indoor heating at subsidised prices north of the Huai River. Employing quasi-experimental variation in particulate matter of 10 micrometres or less in aerodynamic diameter (PM10) generated by this arbitrary policy and a regression discontinuity (RD) design based on distance from Huai River, we estimate the local average treatment effect (LATE) to provide new evidence on the capitalisation of PM10 air pollution into house values. By using panel data covering 30 large cities on either side of the river for the period 2006–2015, we found that 1 µg/m3 (micrograms per cubic metre) reduction in average PM10 is associated with an approximately 1% increase in house prices. The results are robust to using parametric and nonparametric estimation methods, adjustment to a rich set of covariates, and using a subsample excluding first-tier cities.

Suggested Citation

  • Xinghua Liu & Qiang Li & Satish Chand & Keiran Sharpe, 2021. "Effects of air quality on house prices: evidence from China’s Huai River Policy," New Zealand Economic Papers, Taylor & Francis Journals, vol. 55(1), pages 52-65, January.
    • Handle: RePEc:taf:nzecpp:v:55:y:2021:i:1:p:52-65
    DOI: 10.1080/00779954.2020.1827014
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00779954.2020.1827014
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00779954.2020.1827014?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:nzecpp:v:55:y:2021:i:1:p:52-65. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: http://www.tandfonline.com/RNZP20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.