Does Air Pollution Affect Food Consumption?

25 Pages Posted: 14 Nov 2017

See all articles by Han Zhang

Han Zhang

Peking University - Guanghua School of Management

Xing Li

Peking University - Guanghua School of Management

Ping Tu

Peking University - Guanghua School of Management

Xiaona Zheng

Guanghua School of Management Peking University

Date Written: November 10, 2017

Abstract

This paper uses data from a Chinese online grocery store to examine the effect of air pollution on food sales. We find that 100 increase in Air Quality Index (AQI) increases the sales of the grocery store by 5%. This effect is concave, implying that when AQI is low, an increase in AQI has a relatively larger impact on food sales. With regard to the sources of sales increase, our result suggests that consumers tend to upgrade their purchase to more expensive food items in polluted days. We conjecture that the salience of health concerns (referred to as the health-saliency mechanism) leads consumers to buy more healthy and expensive food. Further analysis of sales for organic food confirms our conjecture.

Suggested Citation

Zhang, Han and Li, Xing and Tu, Ping and Zheng, Xiaona, Does Air Pollution Affect Food Consumption? (November 10, 2017). Available at SSRN: https://ssrn.com/abstract=3068704 or http://dx.doi.org/10.2139/ssrn.3068704

Han Zhang

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China

Xing Li (Contact Author)

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China

Ping Tu

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China

Xiaona Zheng

Guanghua School of Management Peking University ( email )

Peking University
Beijing, Beijing 100871
China

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