Information, migration, and the value of clean air

Xuwen Gao, Ran Song and Christopher Timmins

Journal of Development Economics, 2023, vol. 163, issue C

Abstract: Using a variant of the Rosen-Roback model of inter-city migration that incorporates public access to air quality information, we demonstrate that information constraints create a wedge between revealed and true hedonic prices for pollution that depends upon individuals’ perception biases. We empirically test our theoretical predictions by leveraging the unexpected disclosure of PM2.5 data in China. We find that migration decisions become much more responsive to pollution and that the hedonic price of avoiding PM2.5 exposure nearly doubles – from 171 to 336 Chinese Yuan – in response to the information shock. Our results highlight the role of imperfect information in migration decisions and its impact on non-market valuation in countries where public access to information is restricted.

Keywords: Information; Migration; Particulate matter; Rosen-Roback; Compensating differential (search for similar items in EconPapers)
JEL-codes: D83 J61 Q51 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:163:y:2023:i:c:s0304387823000342

DOI: 10.1016/j.jdeveco.2023.103079

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