To mitigate the substantial losses incurred by air pollution, individuals undertake defensive behaviors in the form of health insurance expenses. Leveraging data from the 2011-2017 China Household Finance Survey (CHFS) encompassing 3033 residents, we estimate the causal impact of air pollution on defensive expenditures. Our findings are as follows: (1) Air pollution exhibits a significantly favorable effect on individual commercial health insurance expenses, with a 1% increase in PM concentration correlating to an 11.02% rise in personal commercial health insurance expenditure. (2) Demographics such as younger individuals, married populations, lower educational attainment cohorts, and urban residents, displaying higher sensitivity to air pollution, tend to purchase more insurance coverage. (3) Risk perception emerges as a pivotal channel through which air pollution affects commercial health insurance expenditure. Our conclusions underscore the significance of risk perception in defensive expenditures, thereby optimizing individual risk mitigation strategies.
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