5. Conclusion
Chinese urbanites engage in self-protection against air pollution and richer individuals are more likely to make these investments. For a given level of outdoor air pollution, an individual can reduce her exposure by spending less time outside, and wearing a mask when one is outside. Such an individual can reduce her exposure to indoor air pollution by purchasing an effective filter. Based on a unique data set of Internet purchases, we study household investment in two different self protection products varies as a function of ambient city pollution levels exceeding key alert thresholds. The sales of masks on the days when the government has issued a “heavily polluted” and “severely polluted” alert are 2.9 and 7.2 times those during a “blue sky” day. These two ratios are 1.6 and 3.0 respectively for air filter sales. Controlling for government pollution announcement alerts, consumers also respond to the actual PM2.5 concentration level by buying more masks and air filters. We also find that richer people invest more in self protection products, especially the more expensive but more effective devices like air filters, when air pollution is higher. The low-income group exhibits a very flat air filter purchase propensity as a function of PM2.5 concentration increases, while the middle-income and high-income groups have an elasticity of roughly 0.2. Air filters are more effective than masks in protecting people from air pollution. Differential investment in self protection means that air pollution exposure exacerbates quality of life inequality in Chinese cities.
