Air pollution and food prices: evidence from China

Air pollution is one of the top environmental concerns in China. On days with severe air pollution, people (both consumers and producers) often reduce outdoor economic activities in order to avoid possible health damages. This impacts the market trade of fresh food products, at least in a short run. This empirical study sheds light on the impact of air pollution on the short run prices of three major fresh food products (Chinese cabbage, tomatoes and pork) using daily data from the largest outdoor wholesale market in Beijing. With an increase in AQI (Air Quality Index) by 100 units, prices for Chinese cabbage and tomatoes decrease by 1.19 and 0.89 per cent. With an increase in PM2.5 concentration by 100g/m(3), prices for Chinese cabbage and tomatoes decrease by 0.64 and 0.55 per cent. Air pollution affects vegetable prices, but has no significant impact on prices of pork products.