Environmental regulation and mental well-being: Evidence from China's air pollution prevention and control action plan.

This study investigates how enhanced environmental regulation can improve individuals' mental well-being, focusing on the impact of China's so far most stringent air pollution control policy, the 2013 Air Pollution Prevention and Control Action Plan (APPCAP). Exploiting variations in timing and regions of the implementation of the policy, we find that the APPCAP has significantly improved people's mental well-being. We test several potential socio-economic channels including reduced air pollution, enhanced environmental awareness, improved physical health, and decreased physical activities during periods of heavy pollution, through which environmental regulation may affect mental well-being. Our findings highlight that increased public awareness concerning air pollution plays an important role in the health effects of environmental regulations. The positive effects of environmental regulation on mental well-being are particularly pronounced among individuals aged 45-59 and for those with higher-than-average income or education. We do not find that the positive effects of environmental regulation differ by gender. We further show that the 4-week prevalence of mental/neurological disease dropped significantly, by about 0.38 percentage points, after the implementation of the APPCAP, reaffirming significant mental health benefits from the environmental regulation.