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The impact of transboundary haze pollution on household utilities consumption

Author

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  • Agarwal, Sumit
  • Foo Sing, Tien
  • Yang, Yang

Abstract

This paper examines the causal effects of air pollution on the household consumption of water and electricity in Singapore. Using the transboundary haze pollution caused by forest fires in Indonesia as an exogenous shock, we find that increases in haze pollutant intensity in the air significantly increase water and electricity consumption. In particular, the intra-day and inter-day analyses on hourly household water consumption are consistent with the risk avoidance and the risk mitigation behaviors during severe haze episodes. During the haze periods, households stay indoors and avoid outdoor activities to minimize exposure to health risks. When they need to engage in outdoor activities during the weekdays, they increase efforts in mitigating health risks associated with air pollution. Moreover, the analysis of social media data shows that the level of public awareness of air pollution is positively related to energy consumption by households. In addition, the effects of haze-induced utilities consumption is correlated with the duration of air pollution. While household utilities consumption quickly returns to normal after transitory pollution exposure, the effects are stronger and persistent after a longer period of air pollution; households maintain a higher level of utilities consumption for two months after a lengthy haze, suggesting a substantial spending on additional water and electricity usage due to air pollution events.

Suggested Citation

  • Agarwal, Sumit & Foo Sing, Tien & Yang, Yang, 2020. "The impact of transboundary haze pollution on household utilities consumption," Energy Economics, Elsevier, vol. 85(C).
  • Handle: RePEc:eee:eneeco:v:85:y:2020:i:c:s014098831930386x
    DOI: 10.1016/j.eneco.2019.104591
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    Citations

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    Cited by:

    1. Zhang Hao & Qi Chenyue, 2021. "Impact of environmental and health consciousness on ecological consumption intention: The moderating effects of haze and self‐competence," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(4), pages 1292-1305, December.
    2. Agarwal, Sumit & Wang, Long & Yang, Yang, 2021. "Impact of transboundary air pollution on service quality and consumer satisfaction," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 357-380.
    3. Qu, Weihua & Qu, Guohua & Zhang, Xindong & Robert, Dixon, 2021. "The impact of public participation in environmental behavior on haze pollution and public health in China," Economic Modelling, Elsevier, vol. 98(C), pages 319-335.
    4. Loretta Mastroeni & Maurizio Naldi & Pierluigi Vellucci, 2023. "Who pushes the discussion on wind energy? An analysis of self-reposting behaviour on Twitter," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(2), pages 1763-1789, April.
    5. Gintare Stankuniene & Dalia Streimikiene & Grigorios L. Kyriakopoulos, 2020. "Systematic Literature Review on Behavioral Barriers of Climate Change Mitigation in Households," Sustainability, MDPI, vol. 12(18), pages 1-18, September.
    6. Roy, Suvra & Nguyen, Harvey & Visaltanachoti, Nuttawat, 2023. "Be nice to the air: Severe haze pollution and mutual fund risk," Global Finance Journal, Elsevier, vol. 58(C).
    7. Lee, Chien-Chiang & Wang, Chih-Wei & Ho, Shan-Ju & Wu, Ting-Pin, 2021. "The impact of natural disaster on energy consumption: International evidence," Energy Economics, Elsevier, vol. 97(C).

    More about this item

    Keywords

    Transboundary air pollution; Haze; Environmental externalities; Avoidance behavior; Risk mitigation; Economic activities; Household utilities consumption;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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