APPLIED ECONOMICS AND POLICY From Fog to Smog: Te Value of


Pollution Information American Economic Review, 114, 5, May 2024 LINK TO PAPER


SHANJUN LI


KENNETH L. ROBINSON PROFESSOR OF APPLIED ECONOMICS AND PUBLIC POLICY


Charles H. Dyson School


of Applied Economics and Management Cornell SC Johnson College of Business Cornell University


Co-authors •Shanjun Li Kenneth L. Robinson Professor of Applied Economics and Public


Policy, Charles H. Dyson School of Applied Economics and Management, Cornell SC Johnson College of Business, Cornell University


• Panle Jia Barwick, University of Wisconsin - Madison • Liguo Lin, Shanghai University of Finance and Economics • Eric Yongchen Zou, Ross School of Business, University of Michigan


Summary Economists have long emphasized the importance of information in deci-


sion-making (Stigler 1961). While many developing countries are experienc- ing some of the worst pollution in the world, residents in these countries lack access to credible and readily available pollution information. Tis informa- tion is either not collected, deliberately kept secret, or intentionally distorted by their governments. Little is known about the effects of collecting and dis- seminating pollution information on the daily lives of citizens in developing countries. Filling this knowledge gap is important, because public funding for improving information infrastructure in developing countries competes with basic needs in health care, nutrition, and education.


In 2013, China launched a landmark program to monitor air quality and disclose real-time data, significantly increasing the public’s access to and awareness of pollution information. Te program triggered cascading be- havioral changes such as stronger avoidance of outdoor pollution exposure and increased spending on protective products. Tese behavioral respons- es mitigated the mortality impact of air pollution. Conservative estimates indicate that the program’s health benefits outweigh the costs by an order of magnitude. Te findings highlight the benefits of improving public access to pollution information in developing countries which often experience severe air pollution but lack pollution data collection and dissemination.


CONTENTS TO MAIN


| RESEARCH WITH IMPACT: CORNELL SC JOHNSON COLLEGE OF BUSINESS • 2024 EDITION


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