“Celebrating the 45th Anniversary of the University of Macau”
Air pollution and consumers’ avoidance behavior: Evidence from high-frequency payment data in China
Prof. Shihe FU
Professor, Department of Economics
Economic and Management School
Wuhan University
Date: 30 April 2026 (Thursday)
Time: 10:30-12:00
Venue: E22-G008
Host: Prof. Leona LI, Assistant Professor in Business Economics
Abstract
This paper estimates the impact of air pollution on consumers’ offline consumption behavior using high-frequency, bankcard transaction-level payment data from China in 2015 and 2016. Employing a panel regression approach with thermal inversion as the instrumental variable for daily local air pollution exposure, we find a statistically and economically significant, negative relationship between pollution exposure and consumer spending. On average, a 100 μg/m³ increase in daily PM2.5 concentration leads to a 14% reduction in daily offline consumer expenditures paid via bankcards. The adverse impacts are particularly pronounced for spending on deferrable goods, groceries, and daily life services; and consumers significantly reduce outdoor shopping activities—including travel distance to intra-city shopping venues—during periods of elevated pollution, consistent with avoidance behavior. Older individuals, high- spending consumers, and holiday shoppers exhibit stronger response to pollution. Our findings underscore the potential economic co-benefits, in terms of consumption, achievable through policies improving air quality.
Speaker
Prof. Shihe FU earned his Ph.D. degree in economics from Boston College in 2005 and is currently a professor at Wuhan University. His research areas are urban economics, labor economics, and environmental economics. His publications appear in refereed journals including Economic Journal, Review of Economics and Statistics, Journal of Public Economics, Journal of Labor Economics, Journal of Development Economics, and Journal of Urban Economics. He is an associate editor for Journal of Regional Science, Environment and Development Economics, and co-editor for International Studies of Economics.
All are welcome!
