Pollution exposure and social conflicts: Evidence from China's daily data

Recent evidence suggests that exposure to air pollution adversely impacts health outcomes, cognitive function, and labor productivity, however, less is known about the effect of air pollution exposure on social conflicts. Using daily air pollution, we study the effect of exposure to air pollution on social conflicts. For identification strategies, we estimate models with high-dimensional fixed effects and two instrumental variables using atmospheric inversions and wind patterns as exogenous shocks to local pollution. Our findings suggest a positive impact of air pollution on social conflicts, and the magnitude is larger with more severe pollution exposure. Moreover, the significant differences exist between social conflicts occurring in different workplaces, and those occurring at development levels, both of which are related to the extent of pollution exposure. Finally, taking lottery sales as a proxy for risk preference to investigate the potential mechanisms, we show that the increased social conflicts alone with pollution exposure may be attributed to the rising risk preference. This provides indirect support for a plausible channel through which air pollution results in behavioral and social outcomes. The results are robust to alternative specifications and placebos. The findings suggest that reducing air pollution gains the unintended consequence of preventing social conflicts.