The Value of Information Disclosure: Evidence from Mask Consumption in China

Abstract

We study the effect of information provision on avoidance behavior, using China’s staggered roll-out of air pollution information and a unique dataset of high-frequency mask purchase transactions. Employing a generalized difference-in-differences approach, we estimate that the provision of air pollution information increases expenditures on PM$_{2.5}$ respirators by 32%, which is mainly driven by improved information quality and the addition of PM$_{2.5}$ index. The effect is enhanced by increased attention to pollution alerts and it is more pronounced during heavily polluted days. Our results shed light on the benefits of information provision through inducing avoidance behavior to reduce air pollution exposure.

Publication
Under Review
Zhenxuan Wang
Ph.D. Candidate

My research interests lie at the intersection of environmental and energy economics, climate policy, and industrial organization.