Do consumers try to solve the air pollution problem themselves? the effects of air pollution on purchase of hybrid and electric cars

Juan He and Xiaoyong Zheng

Journal of Economic Behavior & Organization, 2024, vol. 220, issue C, 850-868

Abstract: Using a unique panel dataset on air pollution and car sales from thirty major cities in China across three years, we estimate the impact of air pollution on the adoption of hybrid and electric vehicles. To identify the causal effect, we use three sets of interactive fixed effects to control for a large group of potential confounders and an instrument for the air pollution variable. Our results show that worse air quality leads consumers to purchase more hybrid and electric cars, and the effect is larger in cities with higher incomes. These findings are consistent with predictions from the social preferences theory and point out new directions for strategies to promote the adoption of hybrid and electric cars.

Keywords: Social preferences; Air pollution; Hybrid vehicles; Electric vehicles (search for similar items in EconPapers)
JEL-codes: D9 L62 Q53 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:220:y:2024:i:c:p:850-868

DOI: 10.1016/j.jebo.2024.03.006

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