The impact of lockdown on air pollution: Evidence from an instrument

This paper studies the impact of lockdown measures in response to the outbreak of COVID-19 on a prefecture's air pollution in China. To avoid potential endogenous problems, we exploit the bilateral population flow from the Baidu Migration Index to predict prefectures' probability to undertake lockdown measures. Our results using difference-in-differences with the instrumental variable show that a prefecture's lockdown measures significantly reduce its air quality index (AQI) by around 35%, and yet the result for difference-in-differences with OLS is only around 11%. We also find that a prefecture under lockdown reduces its PM₁₀ and PM_2.5 by around 25% and 35% respectively, and the results of diff-in-diff with OLS are only around 11% and 12%. The sharp difference between these two approaches seems to imply that there is a strong heterogeneity in lockdown stringency across prefectures.