Working Paper: NBER ID: w14751
Authors: Siqi Zheng; Matthew E. Kahn; Hongyu Liu
Abstract: Over the last thirty years, China's major cities have experienced significant income and population growth. Much of this growth has been fueled by urban production spurred by world demand. Using a unique cross-city panel data set, we test several hypotheses concerning the relationship between home prices, wages, foreign direct investment and ambient air pollution across major Chinese cities. Home prices are lower in cities with higher ambient pollution levels. Cities featuring higher per-capita FDI flows have lower pollution levels.
Keywords: Home Prices; Foreign Direct Investment; Air Quality; Urban Economics; China
JEL Codes: F21; Q53; R31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| FDI inflows (F21) | Air quality (Q53) |
| Cumulative FDI per capita (F21) | Particulate matter and sulfur dioxide levels (Q53) |
| Local demand shifts (R22) | Home prices (R31) |
| Housing supply elasticity (R31) | Home prices (R31) |
| Ambient pollution (Q53) | Home prices (R31) |