Abstract:
This paper provides novel evidence on how public disclosure of air pollution information affects private health insurance demand. Exploring the staggered rollout of China's real-time air pollution monitoring and disclosure program as a quasi-natural experiment, we combine household-level survey data with satellite-based pollution measures and estimate a difference-in-differences model. We find that when pollution information becomes publicly available, higher pollution levels significantly increase the likelihood of purchasing private health insurance. A one-unit increase in aerosol optical depth raises insurance coverage by about 2.2 percentage points, an economically meaningful effect given the low baseline coverage rate. The effect is robust to alternative specifications, individual fixed effects, and placebo tests. Mechanism analyses show that the response is driven by heightened pollution risk perception and health concerns rather than income or labor supply effects. The effect is stronger among more risk-averse, less educated individuals and those with lower trust in insurance. The results highlight the role of external information in shaping financial behavior and health risk management decisions.
