Haze Pollution And Urban Economic Growth ——Empirical Analysis Based On Simultaneous Equation Model

In recent years,most areas in the north and east of China are plagued by haze.The issue of haze pollution attracts domestic and foreign widespread attention.However,the potential negative impact of haze pollution on economic growth has not been concerned so far.By a simultaneous equation model,this paper empirically examines the causal relationship between PM2.5 and per capita real GDP,based on panel data of 285 prefecture-level cities from 2004 to 2016.Based on the empirical results,we can draw conclusions as follows:First,haze pollution has a significant negative impact on economic growth.On average,every 1% increase of PM2.5 results in 1.2% to 1.5% decrease of per capita GDP.The traditional single-equation panel model underestimates the adverse environmental impacts on economic growth,because the single-equation model ignores the two-way causal relationship between haze pollution and economic growth caused by endogeneity.Second,there are an inverted “N” shape relationship between haze pollution and economic growth.With the per capita income rising,haze pollution drops first,and then increases after crossing the low “inflection point”,and drops again after crossing the high “inflection point”.Third,the heterogeneity test indicates that there are significant urban size and regional differences in the interplay between haze pollution and economic growth.Finally,the mediating effect test shows that population expulsion effect,fixed asset investment effect,and industrial structure effect are the main mechanisms of haze pollution on economic growth.Conversely,the proportion of secondary industry and automobile exhaust emissions in transportation are the main mechanisms of economic growth on haze pollution.