Abstract
This paper establishes a causal relation between households’ decision of asset allocation and environmental pollution based on urban PM2.5 concentration data and a nationally representative survey in China. We find a significantly negative effect of environmental pollution on households’ demand for housing assets but an inverted U-shaped effect on the demand for risky assets. The effects are remarkably robust to correcting the endogenous issue and a battery of robustness checks. Social interaction can partly explain such an effect of pollution. Furthermore, we also find that because households with lower economic status are at greater risk of exposure to environmental pollution and lack of economic capabilities, their holdings of financial assets decrease more than that of the households with higher economic status when faced with pollution; however, their holdings of low liquid assets declining less.
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Data Availability
The data that support the findings of this study are available from China Institute for Income Distribution but restrictions apply to the availability of these data, which were used under license for the current study, and so are not publicly available. Data are however available from the authors upon reasonable request and with permission of China Institute for Income Distribution.
Notes
Marx K. H. and Engels F. (1961). German Ideology, People’s Publishing House, 545
The data of land surface pressure can be downloaded at https://apps.ecmwf.int/datasets/
The CHIP can be downloaded at http://ciid.bnu.edu.cn/chip/chips.asp?year=2002
The data of PM2.5 can be downloaded at http://sedac.ciesin.columbia.edu/
The marginal effect is calculated at the mean of the control variables. The same below
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Acknowledgements
We thank for the following funding: the surface of National Natural Science Foundation of China [grant No.71773011]; the National “Four Batches” Talents of China [No.47]; and the Key Project and Social Science Research by the ministry of education [grant No.13JZD023]; the Research Fund Project of School of Public Affairs, Chongqing University [2019GGXY001].
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Yulin Liu contributed to the study conception. Study design, data collection, and analysis were performed by Min Zhang. The first draft of the manuscript was written by Min Zhang and Yulin Liu commented on previous versions of the manuscript. All authors read and approved the final manuscript.
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Zhang, M., Liu, Y. Does environmental pollution influence household asset allocation? Evidence from China. Environ Sci Pollut Res 28, 15406–15423 (2021). https://doi.org/10.1007/s11356-020-11710-2
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DOI: https://doi.org/10.1007/s11356-020-11710-2