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Escaping Air Pollution: Do Chinese Students and Immigrants Drive Property Prices and Economic Activity Abroad?

Author

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  • Dasgupta, Sudipto
  • Chang, Yuk Ying

Abstract

We construct a time-series of news coverage about air pollution in China for the period 1977-2019, and verify that such abnormal news coverage is associated with worse air quality in major Chinese cities, for which information is available for a shorter period. We find that that cross-border migration of Chinese citizens, the number of Chinese students going abroad to study, as well as capital flight from China, increase when there is an unexpected increase in air pollution news coverage. We find that U.S. regions with stronger historical ethnic ties to China experience higher property price growth when the “innovation†in air pollution news coverage is higher. We find similar results for residential prices in international cities. Air-pollution driven student inflows increase property prices and employment growth in regions that are major destinations of foreign students. Our study suggests that perception of local environmental and climate risk can have major consequences for the cross-border relocation of capital and labor.

Suggested Citation

  • Dasgupta, Sudipto & Chang, Yuk Ying, 2021. "Escaping Air Pollution: Do Chinese Students and Immigrants Drive Property Prices and Economic Activity Abroad?," CEPR Discussion Papers 16700, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16700
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    More about this item

    Keywords

    Air pollution; Climate change; Migration; Property prices;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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