Self-Protection Investment Exacerbates Air Pollution Exposure Inequality in Urban China

Urban China’s high levels of ambient air pollution both lowers quality of life and raises mortality risk. China’s wealthy have the purchasing power to purchase private products such as air filters that allows them to offset some of the pollution exposure risk. Using a unique data set of Internet purchases, we document that households invest more in masks and air filter products when ambient pollution levels exceed key alert thresholds. Richer people are more likely to invest in air filters, which are much more expensive than masks. Our findings have implications for trends in inequality in human capital accumulation and in quality of life inequality in urban China.