When the wind blows: spatial spillover effects of urban air pollution in China
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This paper estimates air pollution spillover effects in Chinese cities. Estimation of this spillover effect is complicated because neighboring cities share similar business/pollution cycles, and changes in wind direction can be frequent. To circumvent these empirical challenges, we propose a new approach exploiting spatial and temporal variations in PM<sub>2.5</sub> concentrations for major cities in China’s Eastern Monsoon Region during the monsoon season. We find large pollution spillover effects. Estimates based on our preferred model specification suggest that a city’s average PM<sub>2.5</sub> concentration increases by 0.33 (or 0.26) units during the winter (or summer) monsoon season, if PM<sub>2.5</sub> concentrations in cities upwind of this city increase by one unit. Estimated spillover effects in plain and non-plain regions are 14%–16% larger and 45%–71% smaller, respectively, than the baseline estimates. The percentage contributions of PM<sub>2.5</sub> pollution from upwind cities to local PM<sub>2.5</sub> levels vary by region and can be as large as 50%.
