Environmental regulation,political incentives,and mortality in China |
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Institution: | 1. School of Finance, China Financial Policy Research Center, Institute of Public Finance and Taxation, Renmin University of China, China;2. School of Finance, Renmin University of China, China;1. Department of Economics, University of Ioannina, Ioannina, Greece;2. Athens University of Economics and Business, Patission 76, Athens, 10434, Greece;1. Agricultural and Applied Economics, Texas Tech University, Lubbock, TX, 79409, USA;2. Department of Economics, University of Wisconsin, La Crosse, La Crosse, WI, 54601, USA;3. Rawls College of Business, Texas Tech University, Lubbock, TX, 79409, USA;1. ISDC – International Security and Development Center, Auguststr. 89, 10117, Berlin, DE, Germany;2. Pforzheim University, Tiefenbronner Straße 65, 75175, Pforzheim, DE, Germany |
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Abstract: | China enacted an environmental regulation policy in 1998, the “Two Control Zones” (TCZ) policy, to control air pollution in selected cities. Using a panel dataset of 208 prefectural cities for 2001–2012, this study applies a difference-in-differences approach to examine the policy's impact on mortality and identify the role of political incentives. We find the following aspects. (1) The policy significantly reduces mortality in TCZ cities relative to that in non-TCZ cities by 0.305‰ in the period when the policy is strictly enforced. On average, it translates into a 5.2% reduction in mortality. (2) The effect is particularly salient in the years when local officers are evaluated for political promotion and/or when they face stronger pressure for promotion, thus suggesting that political incentives play an important role in determining the effectiveness of environmental regulation policy. (3) The policy reduces industrial emissions of sulfur dioxide instantaneously, while the accumulation of which eventually leads to a lagged reduction in mortality in the cities. (4) The policy yields health benefits worth 1.1 trillion yuan for the treatment period in our sample (i.e., 2006–2012), which accounts for approximately 5.1% of GDP in 2006. |
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Keywords: | Environmental regulation Political incentives Mortality China I18 Q53 Q58 |
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