The Value of Clean Air: Evidence from Chinese Housing Markets

This paper studies the value of clean air by analyzing the effect of China's clean air policy. By exploiting the cross-city variation in the timing of policy implementation and using a panel dataset of 280 cities from 2003 to 2018, we find that the clean air policy boosts housing prices by 4.4%. The finding is robust to a series of potential issues, functional misspecifications, and falsification tests. In addition, we examine whether the effect varies across different price-tier cities and changes over time, and we find evidence of such heterogeneous and dynamic effects.