- Expressways, GDP, and the Environment: The Case of China (with Yang Xie and Bing Zhang), 2017.
Resubmitted, Journal of Development Economics
Abstract: In a matched difference-in-differences setting, we show that China’s expressway system helps poor rural counties grow faster in GDP while slowing the rich rural counties down, compared with their unconnected peers. This heterogeneity is not driven by factors about initial market access, factor endowments, or sectoral patterns, but is consistent with the Chinese government’s development strategy that relatively more developed regions prioritize environmental quality over economic growth, while poor regions pursue the opposite. We further investigate the environmental outcomes and find that expressway connection indeed makes poor counties adopt dirtier technologies, host more polluting firms, and emit more pollutions, contrary to what happens to the rich connected counties. These results imply that recognizing the GDP–environment trade-off can help understand the full implications of infrastructure investment and other development initiatives.
- The Winter Choke: Coal-Fired Heating, Air Pollution, and Mortality in China (with Maoyong Fan and Maigeng Zhou), 2018.
Resubmitted, Journal of Health Economics
Abstract: China’s coal-fired winter heating systems generate large amounts of hazardous emissions that significantly deteriorate air quality. Exploiting regression discontinuity designs based on the exact starting dates of winter heating across different cities, we estimate the contemporaneous impact of winter heating on air pollution and health. We find that turning on the winter heating system increased the weekly Air Quality Index by 36% and caused 14% increase in mortality rate. This implies that a 10-point increase in the weekly Air Quality Index causes a 2.2% increase in overall mortality. People in poor and rural areas are particularly affected by the rapid deterioration in air quality; this implies that the health impact of air pollution may be mitigated by improved socio-economic conditions. Exploratory cost-benefit analysis suggests that replacing coal with natural gas for heating can improve social welfare.
- Mitigating the Air Pollution Effect? The Remarkable Decline in the Pollution-Mortality Relationship in Hong Kong (with Chun Wai Cheung and Yuhang Pan), 2019.
Resubmitted, Journal of Environmental Economics and Management
Abstract: Using transboundary pollution from mainland China as an instrument, we show that air pollution lead to higher cardio-respiratory mortality in Hong Kong. However, the air pollution effect has dramatically decreased over the past two decades: before 2003, a 10-unit increase in Air Pollution Index (API) could lead to a 3.1% increase in monthly cardio-respiratory mortality, but this effect has reduced to 0.5% using recent data and become statistically insignificant. Exploratory analyses suggest that a well-functioning medical system and immediate access to emergency services can mitigate the acute effects of pollution on health.
- Leveraging Political Incentives for Environmental Regulation: Evidence from Chinese Manufacturing Firms (with Shaoda Wang and Bing Zhang), 2018.
Revision Requested, Quarterly Journal of Economics
Abstract: This paper estimates the effect of environmental regulation on firm productivity using a regression discontinuity design implicit in China’s water quality monitoring system. Because water quality readings are important for political evaluations, and the monitoring stations only capture emissions from their upstream regions, local governments are incentivized to enforce tighter environmental regulations on firms immediately upstream of a monitoring station, rather than those immediately downstream. Exploiting this discontinuity, we find that upstream firms’ TFP is 27% lower than that of downstream firms, indicating that China’s water-pollution abatement target (2016-2020) would lead to roughly one trillion Chinese Yuan loss in industrial output value.
(Updated in 2019, Formerly Titled "Environmental Regulation and Firm Productivity: Estimates from a Regression Discontinuity Design")
[Gregory Chow Best Paper Award, Chinese Economists Society, 2018]
- Straw Burning, PM2.5 and Death: Evidence from China (with Tong Liu and Maigeng Zhou), 2019.
Revision Requested, Journal of Development Economics
Abstract: This study investigates the impact of burning off agricultural straw on air pollution and health in China. We estimate that ten additional straw burns in a month detected by the satellite can lead to a 7.62% increase in PM2.5 concentration and a 1.56% increase in the local death rate. That implies that a 10µg/m3 increase in PM2.5 will increase mortality by 3.25%. Straw burning increases the incidence of death from cardiorespiratory diseases, primarily killing middle-aged and older people in rural areas. Subsidizing the recycling of straw brings significant health benefits and is estimated to avert 21,400 pre-mature deaths annually.
II. Under Review or Prepare to Submit
- Influence Activities and Bureaucratic Performance: Evidence from a Large-Scale Field Experiment in China (with Alain de Janvry, Elisabeth Sadoulet, Shaoda Wang, and Qiong Zhang), 2019.
Abstract: Subjective performance evaluation is widely used by firms and governments to provide work incentives. However, delegating evaluation power to senior leadership could induce influence activities: agents might devote much efforts to please their supervisors, rather than focusing on productive tasks that benefit their organizations. We conduct a large-scale randomized field experiment among Chinese local government employees and provide the first rigorous empirical evidence on the existence and implications of influence activities. We find that state employees are able to impose evaluator-specific influence to affect evaluation outcomes, and that this process could be partly observed by their co-workers. Furthermore, introducing uncertainty in the identity of the evaluator, which discourages evaluator-specific influence activities, can significantly improve the work performance of state employees.
- Energy Saving Can Kill: Evidence from the Fukushima Nuclear Accident (with Takanao Tanaka), 2019.
Abstract: Following the Fukushima nuclear accident, Japan gradually shut down all its nuclear power plants, causing a country-wide power shortage. In response, the government launched large-scale campaigns that aimed to reduce summer electricity consumption by as much as 15% in some regions. Because electricity use plays a key role in mitigating climate impacts, such policies could potentially damage the population’s health. Exploiting the different electricity-saving targets set by different regions, we show that the reduction in electricity consumption indeed increased heat-related mortality, particularly during extremely hot days. This unintended consequence suggests that there exists a trade-off between climate adaptation and energy saving.
- The Impact of Clean Water on Infant Mortality: Evidence from China (with Maoyong Fan), 2019.
Abstract: This paper examines the impact of clean drinking water on infant mortality in China. We construct a cost surface based on the geographic distribution of Chinese major water sources (mostly lakes and reservoirs) and use the least-cost distance between water sources and infant mortality surveillance areas as the instrumental variable for piped water access. We show that provision of piped water significantly decreases infant mortality. A 10-percentage-point rise in piped water coverage will lead to 16% decrease in the infant mortality rate. Piped water provision is particularly beneficial in rural areas and in regions with slightly polluted surface water. The benefits of piped water in rural china are significantly greater than its estimated costs.
- Guns and Roses: Police Complicity in Prostitution (with Wenwei Peng), 2019.
Abstract: Police complicity in organized crime is not uncommon yet extremely difficult to be empirically examined. Using unique sex transaction data from China, we provide evidence that police can be complicit in organized prostitution. Specifically, greater police density discourages high-penalty sex transactions taking place in hotels and homes, where freelance prostitutes meet their clients, while encouraging high-penalty transactions in massage parlors and sauna houses, where prostitution is blatantly organized. The complicity effect is particularly salient during periods of local crackdowns, suggesting selective enforcement. Changes in local leadership and visits of the central government’s discipline teams can attenuate the effect.
- Can Technology Solve the Principal-Agent Problem? Evidence from Pollution Monitoring in China (with Michael Greenstone, Ruixue Jia, and Tong Liu), 2019
Abstract: This paper examines the consequences of automation of air pollution monitoring as part of the Chinese federal government’s “war on pollution”. Exploiting 654 regression discontinuity designs based on city-level variation in the exact day that monitoring was automated, we find that reported airborne particulate matter (i.e., PM10) concentrations increased by 41% just after the new monitors were operating and using a difference-in-differences design remain elevated a year later. Additionally, a variety of other measures suggest that the quality of PM10 data greatly improves as its variability and correlation with satellite measures of PM increase. Further the city-level measures of manipulation are positively correlated with the true PM10 concentration and when the local party secretary was born in the same province, a proxy for the ease of collusion, and negatively correlated with per capita GDP. Overall, the evidence both illustrates the extent of the principal (i.e., central government) – agent (i.e., local officials) problem and that, at least with respect to pollution monitoring, technology can mitigate it by reducing the scope for hidden actions.
IV. Working in Progress
- Pollution alerts, contingency regulations, and the economic costs
- Environmental regulation and marginal abatement costs of China's manufacturing firms
- The selection and making of civil servants
- Understanding the political economy of crime
- Trends and determinants of suicide
- Climate change, mortality, and adaptation
- Trade, Pollution, and Growth