Beschreibung:
Using a proprietary data set of auto insurance claims from May 2014 to December 2016, this paper examines the influence of air pollution on the number and severity of traffic accidents in China. Combining an instrumental variable strategy with high-dimensional fixed effects, we find that air pollution significantly increases the traffic accident rate, with a 100-unit increase in the air quality index resulting in a 0.41% increase in traffic accidents within one day. However, there is a significant reduction in serious accidents as air pollution increases, reflected in a decrease of 502 yuan per claim made with a 100-unit increase in the air quality index. Further analysis indicates that this may be related to cautious driving behavior resulting from the driver’s increased risk aversion. By exercising caution and care on the road, drivers can reduce the negative influence of air pollution on road safety and avoid non-subjective behavioral biases