1. Introduction
For a long time, most countries have adopted an economic-developed strategy without controlling the pollution. The consumption of fossil energy improves the economy, but it also makes the environmental quality gradually decline, forming the environmental Kuznets curve [
1]. At present, most countries are still facing severe environmental problems such as air pollution and water pollution. Since people can perceive air pollution more efficiently, many previous studies have found adverse effects of air pollution on human physical and mental health and welfare [
2,
3,
4]. There is also some literature examining the changes in people’s behavior and subjective well-being in response to pollution [
5,
6,
7,
8]. However, when discussing the effects of pollution on individual perceptions and behavioral decisions, most of the literature ignores the difference between people’s perceived air pollution levels and measured pollution levels [
9]; i.e., it ignores the role of pollution information.
The impact of pollution on well-being may be physical health such as lung disease or psychological health such as depression. Previous studies have found that these two effects tend to be negative, thereby reducing people’s happiness [
10,
11,
12,
13,
14]. As for pollution information, its impact on well-being and channels may not be intuitive, because people’s response to pollution information is unclear. It has been widely recognized that information affects people’s emotions and behaviors. As the type of information available to people, pollution information will also affect people’s psychological emotions. In other words, when people face the real pollution information, their emotional changes will lead to changes in happiness.
However, most previous studies did not distinguish the differential effects of perceived and measured air pollution, and they did not examine the impact of changes in subjective air pollution. Most of them assume that people can recognize the accurately measured air pollution even though they do not point out it. However, the rationality of this assumption should be questioned, because people’s perceived and measured air pollution levels are often inconsistent [
15]; that is, people may underestimate or overestimate the quality of the environment around them. Moreover, the two of them have different effects on subjective well-being. For example, Mackerron and Mourato [
16] found that once residents are aware of the harm of air pollution to human health and the ecosystem, regardless of the level of measured air pollution, perceived pollution will directly damage residents’ well-being. Therefore, we believe that the disclosure of measured pollution information will correct people’s cognitive bias, which will cause changes in people’s subjective air pollution levels, thus affecting their well-being. Therefore, this paper examines the changes in people’s well-being before and after the disclosure of pollution information, regardless of whether the measured pollution level has changed in this process.
When pollution information is either not collected or deliberately withheld by the government, it is hard to respond to pollution for individuals, which is more severe in most developing countries [
15]. China is a typical country that has this peculiar problem, where rapid industrialization and urbanization have produced severe environmental pollution, with air pollution being a major concern. During the 2000s, the daily average concentration of delicate particulate matter (PM
2.5) exceeded 50 ug/m
3, which is five times above the World Health Organization guideline [
15]. According to the “2015
Environmental Status Bulletin” released by the Ministry of Environmental Protection, only 73 (21.6%) out of 338 Chinese cities met the air quality standard [
17]. With the rapid growth of the social economy, governments are more likely to pay more attention to air pollution as well as the increment of public awareness. Correspondingly, the people’s demand for a better environment has become stronger [
18,
19]. During the period of 2013 to 2014, China gradually carried out a real-time air quality monitoring and disclosure program throughout the country, resulting in rapid and sudden changes in residents’ access to pollution information [
17].
Based on a quasi-natural experimental context on the gradual disclosure of PM
2.5 information in China, this paper examines the impact of pollution information disclosure on residents’ life satisfaction. We make three main contributions to the literature. First, we contribute to the literature on information and residents’ subjective feelings. To the best of our knowledge, studies that examine the role of pollution information remain scant. Barwick et al. [
15] first examined the effect of pollution information disclosure on avoidance behavior, health, and house prices and estimated the value of pollution information disclosure items. However, it does not focus on the effect of pollution information on personal feelings. Personal feelings measured by subjective well-being or life satisfaction are an essential part of formulating and improving environmental policies for people’s increasing the pursuit of better environmental quality.
Second, most of the previous literature applies the cross-sectional data to detect the causal effect of pollution information, leading to a serious endogeneity. In contrast, this paper identifies the causal effect of pollution information by using a quasi-natural experiment approach, which is considered to avoid similar drawbacks [
20]. Based on China’s specific pollution information disclosure context, this paper combines CFPS microdata with macro pollution data and uses a DID model to examine the causal effects, effectively addressing the endogeneity in the identification design. Moreover, since the CFPS data are the most representative and have abundant respondents with rich individual characteristics in China, it can essentially solve the problem of omitted variables and significantly improve the validity of our empirical findings.
Finally, this paper contributes to understanding the channels for pollution information distinguished from pollution on residents. The effect of pollution on well-being mainly affects people’s mood, causes respiratory diseases, or indirectly affects well-being through daily behavior [
3]. Different from the effects of pollution, pollution information affects residents’ well-being in three ways: the first is to enhance or correct people’s environmental perceptions, the second is to promote changes in people’s daily behaviors, while the third is to contrast with other environments and affect subjective feelings. We examine each of these three channels, which can serve as a guide to public policy formulation to improve the welfare of residents.
The upcoming sections are organized as follows.
Section 2 reviews the literature on air pollution and information effects;
Section 3 introduces the background of PM
2.5 information disclosure in China;
Section 4 presents the empirical strategy and data;
Section 5 discusses the results, and
Section 6 concludes.
3. Institutional Background
Environmental pollution in China has become increasingly severe since the reform and opening up in 1978 [
53,
54]. However, the types of pollutants at different stages of development are somewhat different, and the focus of the corresponding environmental regulation policies has also changed. In 1982, the first Chinese ambient air quality standard was established,
Atmospheric Environment Quality Standard, which stipulates that the primary pollutants are total suspended particles, coarse particulate matter (PM
10), sulfur dioxide (SO
2), nitrogen oxides (NO
x), carbon monoxide (CO), and ozone (O
3). However, until the 21st century, the main threat to air quality was sulfur dioxide from coal burning. In response, the Chinese government introduced the two-control zone policy (TCZ) in 1998, which specifies the designation of acid rain and sulfur dioxide pollution control zones throughout the country.
Starting in the early 2000s, particulate matter (PM) became the primary pollutant [
55,
56]. Thereafter, the government regulatory measures shifted to city-based air pollution reduction [
57,
58,
59], but these efforts proved ineffective due to local governments’ strong competitive incentives for economic growth and poor monitoring and enforcement by the central government. After 2008, the increasing frequency of hazy weather in China, especially in northern cities during winter, attracted much attention from social media and the general public. The culprit behind the haze began to point to PM
2.5, which is a pollutant that has long existed in China at high levels but is not clearly recognized by residents [
17].
Frequent smog pollution and public focus on environmental quality promoted the introduction of policies. In February 2012, China’s Ministry of Environmental Protection (MEP, now Ministry of Ecology and Environment) issued the
Ambient Air Quality Standards, which set a schedule for monitoring and releasing PM
2.5 data, formally incorporating PM
2.5 into the ambient air quality evaluation system, requiring localities to complete the installation of monitoring equipment and releasing real-time monitoring data. After that, the MEP introduced a three-phase implementation plan for the new air quality standards. The first step was to install new pollutant monitors in critical regions such as Beijing, Tianjin, and Hebei, the Yangtze River Delta, and the Pearl River Delta, as well as in municipalities and provincial capitals, and to make pollution data public by the end of December 2012. The second step was to carry out environmental monitoring in 116 cities, including key cities and model cities for national environmental protection, and to make the data public by the end of October 2013. The third step was to monitor and release new indicators in all prefecture-level cities by November 2014. In the actual implementation process, however, the China National Environmental Monitoring Center made public the PM
2.5 real-time monitoring data of all cities nationwide in four batches, namely on 1 January 2013 (76 cities), 1 October 2013 (38 cities), 1 January 2014 (97 cities) and 1 January 2015 (179 cities) (
http://www.cnemc.cn/en/, accessed on 1 October 2021).
The real-time PM
2.5 monitoring-and-disclosure program brings a flood of pollution information. With the media’s frequent broadcasting of PM
2.5 data, the public’s cognition of PM
2.5 experienced the process from scratch.
Figure 1 shows the trend of search index for the term PM
2.5 from 2011 to 2018 in Baidu, the largest search engine in China, which summarizes the number of queries for PM
2.5 in China every day among both desktop and mobile users. It can be found that the first climb in search volume for the term PM
2.5 occurred in December 2011, doubled at the end of 2012, and nearly tripled at the end of 2013 from its peak in 2012, with subsequent years also showing seasonal peak changes, which is consistent with the frequent occurrence of winter pollution in China.
Figure 1 reveals the interaction between PM
2.5 information disclosure and residents, which is likely to have a substantial impact on their daily life perceptions and behaviors. The following section examines the effects of information disclosure on residents’ life satisfaction using a quasi-natural experiment design.
6. Conclusions and Policy Implications
Based on the quasi-natural experimental approach, this paper investigates the effect of pollution information disclosure in China on residents’ life satisfaction and finds that it significantly reduces residents’ life satisfaction through the cognitive effect, avoidance effect, and envy effect. For every 1% increase in the average annual concentration of PM2.5, pollution information disclosure reduces residents’ life satisfaction by 0.04 points, accounting for about 1.21% of residents’ average life satisfaction. This effect is more pronounced among young and middle-aged groups, residents with good physical conditions, higher education, higher income, and urban residents. Many developing countries, including China, are facing severe environmental pollution, as the formulation of better environmental policies remains their primary focus. Thus, the above findings provide some insights into the public policy toward information.
Firstly, environmental policies aimed at improving residents’ welfare may bring unexpected negative effects early on. With the increase in people’s income, their demands for higher environmental quality become stronger and stronger, which obliges the government to strengthen environmental regulation and increase administrative transparency in environmental governance. It is expected that with the advancement of environmental management, the welfare of residents will gradually increase. However, before environmental information disclosure improves environmental quality, this may also lead to the decline in residents’ short-run subjective satisfaction, since they are aware of their living conditions early, i.e., in regions with poor environments. While strengthening environmental governance, the government can give the necessary policy publicity at the initial implementation stage of similar policies to enhance their confidence in environmental management.
Secondly, environmental policies need to consider the pursuits of different groups to avoid the decline in life satisfaction caused by pollution avoidance behavior. After residents obtain pollution information, engaging in avoidance behavior has a particular cost, which may increase the economic burden on low-income groups and reduce their life satisfaction. Furthermore, low-income groups are more likely to be exposed to pollution, such as cooking with solid fuel and working with more pollution exposure [
59]. The government can consider providing pollution subsidies to low-income and high-pollution exposed groups, such as issuing free masks. More importantly, it is necessary to emphasize the benefits of avoiding behavior on long-term health to alleviate the temporary psychological discomfort of these residents after disclosing information.
Finally, the government should continue strengthening environmental regulations to reduce the long-run negative effect of information disclosure. As the negative impact of information disclosure increases with the aggravation of pollution, if residents cannot see the improvement of environmental quality from the disclosed information, their happiness may be further reduced. Therefore, the government should increase investment in environmental governance, respond to residents’ environmental demands, improve residents’ sense of participation in the governance process, and minimize the negative impact of environmental pollution. In addition, for residents’ temporary dissatisfaction with environmental quality, the authorities should give a detailed environmental governance plan to eliminate their doubts.
This paper also has some limitations indeed. There is a specific interval between the survey time of CFPS data and the disclosure time of pollution information, which may reduce residents’ sensitivity to pollution information, and then, the estimated results may be underestimated compared with the disclosure time. However, the substantial evidence in this paper still shows that the negative effect of pollution information is real and should be taken seriously in the formulation of relevant policies.