Air pollution and online lender behavior: Evidence from Chinese peer-to-peer lending

Xiao Chen and Gangxing Guo

Journal of Behavioral and Experimental Finance, 2024, vol. 42, issue C

Abstract: This paper examines the effect of air pollution on individual lenders' decisions. Using unique data from the leading peer-to-peer lending platform, we find evidence that for every 10 units increase in the air quality index (AQI), the lender would lend RMB 5.47 yuan more in one single bid and 6% earlier in the fund-raising period. Moreover, the impacts from PM2.5 and CO pollutants are serious. The older people and people that are not well-educated would significantly suffer from air pollution. We further explore three potential mechanisms: physical channel, physiological channel as well as psychological channel, and show that the first two are valid. Overall, our findings shed light on the influence of environmental factors on online lending participants.

Keywords: Air Pollution; Peer-to-peer Lending; Behavioral Bias; Individual Lenders (search for similar items in EconPapers)
JEL-codes: D14 G20 Q53 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:42:y:2024:i:c:s2214635024000340

DOI: 10.1016/j.jbef.2024.100919

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