Statistics Seminar（2015-07）

Topic：Gone with the Wind or Come With the Wind: the Spatial Externality of Air Pollution in China

Speaker：Mengmeng Guo, Southwestern University of Finance and Economics

Time：Thursday, 21th May, 14:00-15:30

Location：Room 217, Guanghua Building 2

Abstract：This paper studies the spatial externality of air pollution (NO, NO2, SO2 and O3) in China using the monthly city-level data of 287 China's cities from 2004 to 2011. We classify the surrounding cities into four groups - within 200, 200-400, 400-600 and 600 plus Km, and we assume that the fourth groups air pollution does not affect the local air quality. Moreover, we consider the wind direction and assume only the up-wind cities air pollution matters the local air quality. Therefore, we integrate the wind direction and distance into the spatial weighting matrix. With a spatial auto-regressive model, we find that the air pollution in up-wind cities have a significant and substantial impact on the air quality of down-wind cities. For NO, NO2 and SO2, if the air pollution level in the up-wind cities within 200 and 200-400 Km increases by 1 percent, the down-wind cities air pollution level respectively increases by 0.3-0.5 and 0.15-0.25 percent; while the impact of air pollution in the up-wind cities within 400-600 Km on the air quality of down-wind cities is either statis- tically insignificant or close to zero. For O3, the effect is not quite significant. These results are robust if we use 300, 600 and 900 Km as the thresholds for the distance to construct the spatial weight matrix. The results suggest reducing the local air pollution needs a coordination with surrounding cities, at least the surrounding cities within 400 Km.

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