Latitudinal and longitudinal variations in the impact of air pollution on well-being in China

Air pollution has resulted in high costs of living due to additional expenditures to combat the negative health effects, and the relationship between air pollution and well-being is of burgeoning interest. In this paper, the development and life index including 42 indicators is introduced to measure much broader dimensions of well-being in China at the macro level, which helps to compare the well-being of different regions. This paper uses provincial-level panel data from 2004 to 2013 in China, to empirically analyze and compare the impact of air pollution on well-being in latitudinal and longitudinal settings, based on regression methods, such as 2SLS, LIML, GMM and IGMM. The results show that although increased air pollution negatively affects well-being in general, the magnitude of the impact differs by region. Specifically, in China's northern regions, air pollution had a significantly negative impact on well-being, while the negative impact was weaker in southern China; moreover, a strong negative impact was found in western China, while a weak negative impact was found in eastern and central China. The time effect was also found to influence air pollution. Finally, this paper found that the natural birth rate and income level served as functional mechanisms of the effect of air pollution on regional well-being. These findings are useful in guiding government policy for determining the optimal balance between air quality control for economic growth and regional well-being.