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Title: Negotiating housing deal on a polluted day : consequences and possible explanations
Authors: Qin, Yin
Wu, Jing
Yan, Jubo
Keywords: Social sciences::Sociology
Issue Date: 2019
Source: Qin, Y., Wu, J. & Yan, J. (2019). Negotiating housing deal on a polluted day : consequences and possible explanations. Journal of Environmental Economics and Management, 94, 161-187.
Project: R-297-000-129-133 
Journal: Journal of Environmental Economics and Management 
Abstract: The topic of air pollution has drawn considerable attention globally. In this paper, we examine the immediate effect of air pollution on a substantial decision, that is, a housing purchase. By linking housing purchasing behavior with the air quality in Beijing, we document market participants' behaviors unexplained by rational economic theories. Our main result suggests that the transaction prices on a severely polluted day are 0.65% higher than those of the days without pollution, other things being equal. This translates into approximately 3.51 million yuan daily increase based on the average transaction volume and price on a typical day in Beijing. The heterogeneity analysis further suggests that this effect is mostly driven by non-local and low income buyers. After ruling out rational explanations, we demonstrate that our empirical results are consistent with salience theory under weak assumptions.
ISSN: 0095-0696
DOI: 10.1016/j.jeem.2019.02.002
Rights: © 2019 Elsevier Inc. All rights reserved.
Fulltext Permission: none
Fulltext Availability: No Fulltext
Appears in Collections:SSS Journal Articles

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