The Relationship between Air Quality and Financial Risk Aversion: A View of Hetero‐Geneous Response to Air Pollution

• Published in: Developing economies Vol. 63; no. 2; pp. 183 - 206
• Main Authors: Ma, Xunzhou, Liang, Liurong, Wu, Zhen‐Xing, Cao, Zhicheng, You, Yibo, Xue, Cheng
• Format: Journal Article
• Language: English
• Published: Kyoto, Japan Wiley Publishing Asia Pty Ltd 01.06.2025; INSTITUTE OF DEVELOPING ECONOMIES - JETRO
• Subjects: Affects; Air pollution; Air quality; Behavior; China; Cognitive ability; Concern about air quality; Emotional responses; Financial risk aversion; Outdoor air quality; Risk; Risk assessment; Risk aversion; China

This paper conducts experiments on a sample of subjects from Chengdu and Wuhan, China, who are mostly unconcerned about air pollution. We provide evidence on the relationship between air quality and financial risk aversion by assessing the plausibility of two channels: affects and cognitive ability....