Air pollution and defensive behavior: Evidence from transaction data in China

Qingqing Yang and Xinping Dong

PLOS ONE, 2024, vol. 19, issue 11, 1-20

Abstract: This study presents empirical research about the defensive behavior of air pollution, that is, health insurance purchases. Using transaction-level data from a large insurance company, covering more than half a million insurance contracts from nineteen cities in China from 2014 to 2018, we empirically imply that an increase of 10% in AQI leads to a 0.37% uptick in the number of daily sales of health insurance contracts by the company within the city. The effect is non-linear and is more pronounced when the AQI exceeds 200. Besides, the defensive cost for a one-unit increase in AQI accounts for around 1.70% of individual income annually. We demonstrate that the positive impact of air pollution on health insurance purchases is primarily driven by health management awareness and social interaction.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0307295

DOI: 10.1371/journal.pone.0307295

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