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Air pollution and risk preference

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  • Park, WooRam
  • Kim, Yongmi

Abstract

We empirically investigate whether exposure to air pollution alters an individual's risk preference. We utilize South Korean individual-level panel data, which contains information on risk preferences, locations, and interview dates. By exploiting the within-individual variation in risk preference and exposure to air pollution on the interview day, we find that a higher level of air pollution is associated with a lower probability of having a risk-loving preference. We also find that the impact of air pollution on risk preference is mostly transitory and contemporary.

Suggested Citation

  • Park, WooRam & Kim, Yongmi, 2022. "Air pollution and risk preference," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 566-579.
    • Handle: RePEc:eee:jeborg:v:202:y:2022:i:c:p:566-579
    DOI: 10.1016/j.jebo.2022.08.024
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    Cited by:

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    2. Liu, Kui & Meng, Chuyan & Yang, Shasha & Zhang, Guanglu, 2024. "Air pollution and individual risk preference: Evidence from China," Energy Economics, Elsevier, vol. 136(C).

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    More about this item

    Keywords

    Air Pollution; Comprehensive Air-quality Index (CAI); Stability of Preferences; Risk Preference;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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