Research Statement

As an economist, my ultimate goal is to contribute to sustainable development. My research has three characteristics.

  1. Significant Real-World Challenges. My work aims to address challenges about sustainable development such as climate change, air pollution, water pollution, and nutrition. I believe that economics can provide powerful tools to understand and tackle these pressing issues.

  2. Sharp Policy implications. My goal is not only to understand policy impacts but also to inform effective policy responses. I mainly care about environmental policy, health policy (nutrition and public policy), and aid provision.

  3. Interdisciplinary collaboration with scientists. This interdisciplinary strategy enables me to tackle these challenges from a comprehensive perspective, resulting in research that is both scientifically grounded and economically insightful.

Working Papers

Economics Papers

  1. “Climate Risks and The Performance of Chinese-Listed Companies” (with Guojun He) Environment
    2. [Abstract]This paper investigates the impact of physical climate risks on the performance of publicly listed companies in China over nearly two decades. We collect comprehensive climate risk data from multiple sources, including extreme high and low temperatures, droughts, floods, and typhoons, and incorporate various forms of physical climate risks into our analysis. Employing a two-way fixed effects model for company-by-year panel data, we analyze the effects of these risks on company profitability, measured by Return on Assets (ROA). Our findings indicate that the exposure of subsidiaries to climate risks has a significantly negative impact on profitability, while the exposure of headquarters is inconsequential. We also examine the adaptation strategies employed by companies in response to climate risks and find that aggregate-level adaptation outperforms firm-specific counterparts in China. The paper further investigates the stock market’s reaction to physical climate risks and reveals that the stock market has scarcely accounted for the impacts of these risks in comparison to the measure of accounting profitability. Our study contributes to the climate finance literature by providing evidence of the effects of physical climate risks on company performance in China and highlighting the importance of considering subsidiaries’ climate risks and adaptation strategies.
  2. “Environmental Regulation and Firms’ Extensive Margin Decisions” (with Min Wang) Environment Development
    • R&R at Journal of Environmental Economics and Management
    • CES Best Student Paper Award, Chinese Economist Society, 2022
    [Abstract]The paper explores the impacts of environmental regulation on Chinese firms’ extensive margin decisions and consequent changes in the market structure of regulated industries. Although environmental regulation deters firm entry and increases firm exit, it asymmetrically targets entrants more than incumbents. Through the market selection mechanism, large and private entrants are less inclined to enter the market in response to regulation, while small incumbents are more likely to exit. We finally examine whether incumbents in regulated cities adjust their inter-city investments to non-regulated cities and find no significant results, alleviating concerns regarding the regulation’s spatial spillover effects.
  3. “Gone with the Aid: How Paired Assistance Program Affects High-Stakes College Choices” (with Le Kang, Qinrui Xiahou and Peng Zhang) Development
    • Under review
    [Abstract]As the world contends with persistent poverty and losses from natural disasters, the provision of aid becomes increasingly vital. However, the empirical examination of the mutual benefits of aid is complicated due to endogeneity concerns. This paper provides a novel perspective on the unintended consequences of aid by exploring a post-earthquake reconstruction program in China. Leveraging the quasi-random pair assignment, we find a 40% increase in students from aided counties choosing universities in donor provinces, with stronger responses from high-achieving and engineering students. Besides, attending universities in donor provinces can increase students’ likelihood of migrating to these provinces and lifetime earnings by 26.43%. This paper underscores the potential benefits of aid for both providers and recipients: providers can attract skilled individuals and garner affinity from aided regions, and recipients can experience lifelong benefits.
  4. “Environmental Health Benefits of Public Infrastructure: Evidence from Tap Water and Water Pollution in China” (with Jintao Xu and Ding Ma) Environment Heatlh Development
    • Excellent Paper Award, The 8th Annual Meeting of the China Labor Economists Forum (Shanghai University of Finance and Economics), 2024
    • Excellent Paper Award, The 7th China Health Economic Development Forum (Sichuan University), 2024
    [Abstract]Based on data from the China Health and Nutrition Survey and Surface Water Quality Weekly Report, we estimate the effects of water pollution, tap water, and their interaction on individual health status. Using the panel IV regression method, we find that water pollution significantly increases the morbidity rate, while ignoring the different levels of pollution exposure caused by the use of tap water may lead to a serious underestimate of the impact of water pollution. Regression results show that tap water can offset about 60% of the negative health effects of water pollution, and the non-offsetting part may come from pollutants that cannot be eliminated by treatment processes in waterworks. Further analysis finds that the long-term health benefits of tap water are one order of magnitude higher than the short-term health benefits, suggesting that sustained water quality improvement has a long-term impact on health. Finally, comparing the disease cost and the total health cost caused by water pollution, we find that nearly 2/3 of the health cost can be attributed to the disease cost. As one of the most important infrastructure investments, the adoption of tap water greatly eliminates the negative impact of water pollution on the health of Chinese residents. This has important general implications for low-income countries with a low proportion of tap water supply.
  5. “Climate Change and The Spatial Distribution of Industries” (with Ding Ma, Min Wang and Xiumei Yu) Environment Development
    6. [Abstract]This paper explores the impacts of long-term temperature changes on the spatial distribution of industries, focusing on temperature effects on firm entry and exit. Using the information on all firms registered in China, we find a robust inverted U-shaped relationship between temperature change and firm entry and a significant relationship between high temperature and firm exit. This result indicates that extreme cold or hot temperatures reduce firm entry and increase firm exit. The effects are more significant for large firms and differ across sectors. In response to extreme temperatures, firms may migrate across regions through inter-regional equity investments to create new firms. The long-run projection shows that climate change may significantly reshape the spatial distribution of industries.

Multi-disciplinary Papers

  1. “Optimal Design in China’s Pollution Abatement Target” (with Guojun He and Fangyuan Peng) Environment
    2. [Abstract]Addressing air pollution is a critical challenge. Traditional air pollution regulations chiefly focus on areas with the highest pollution levels. However, the regions with the most significant pollution levels may not always be the primary contributors to nationwide pollution due to the long-distance transport of air pollutants. This paper uses high-frequency backward trajectory data to examine the spillover effects of PM2.5 pollution in China from 2015 to 2023. The city-pair regression demonstrates a statistically significant positive association between the pollution levels in source and destination cities. Notably, the geographic distribution of air pollution spillover impact substantially diverges from the pattern of PM2.5 concentration, highlighting a discrepancy between local air pollution levels and their national contributions. This study further shows that China’s past city-level PM2.5 reduction targets were mainly based on PM2.5 concentration rather than the local air pollution’s contribution to national levels, indicating a potential loss in efficiency. Finally, the paper suggests an alternative pollution reduction target allocation strategy that considers spillover effects. The findings imply that China has disproportionately concentrated on the most polluted cities while under-responding to many less-polluted cities with significant spillover impacts.
  2. “Extreme Temperatures Lead to Unhealthy Nutrient Intake” (with Xi Chen, Ding Ma and Jintao Xu) Environment Heatlh
    • Excellent Paper Award, The 6th China Health Economic Development Forum (Wuhan University), 2023
    [Abstract]Climate change-induced extreme temperatures threaten agriculture and exacerbate global food insecurity. While the temperature effects on food supply are well-known, we provide the first evidence of short-term fluctuations in extreme temperatures influencing food consumption and nutrition intake in China over two decades. The fixed effect models demonstrate that extreme heat reduces carbohydrate and protein intake without affecting fat consumption, whereas cold weather increases all of them and has a largest effect on fat consumption. Vegetable consumption significantly decreases during extreme heat, while dried legume intake notably increases during extreme cold. In contrast, cereal consumption peaks on hot days and declines on cold days. This paper reveals that air conditioners, fans, and heating systems effectively mitigate the impact of temperature extremes, while refrigerators offer minimal benefits. Thus, biological appetite, rather than food accessibility, primarily drives nutrient intake during extreme temperatures. Besides, rural, low-income, male, and child populations exhibit lower vulnerability. Our study suggests climate change may highly decrease the intake of carbohydrate and protein, but not in the same proportion as fat, offering a novel perspective on the temperature-health nexus.
  3. “Aquatic Product Intake and The Incidence of Chronic Diseases” (with Jintao Xu) Heatlh
    4. [Abstract]This paper employs a Cox proportional hazard model to examine the impact of aquatic product consumption on the risk of four noncommunicable diseases (NCDs) in China, including hypertension, diabetes, heart attack, and stroke. Since the effect of food consumption on health outcomes may be nonlinear, this paper utilizes a nonparametric binned approach to encapsulate the nonlinear effect of aquatic product consumption, exploring the optimal level of intake. Our findings suggest that, compared to no aquatic product intake, consuming less than 100 g/week of aquatic products significantly diminishes the risk of most NCDs. However, we did not find substantial evidence supporting the recommended amount (280-525 g per week) of aquatic product consumption suggested by the Chinese dietary guidelines. This paper has significant implications for diet and nutrition policies.
  4. “Temperature-Dissolved Oxygen Relationship Challenges Water Quality Management Under Climate Change” (with Ding Ma and Jintao Xu) Environment
    5. [Abstract]Climate change significantly affects various pollution issues, including water quality. This paper explores the influence of temperature on water pollution indicators using a dataset from almost 150 water monitoring stations in China from 2004 to 2017. The study reveals a dominant correlation between dissolved oxygen concentration and air temperature, significantly affecting the seasonal patterns of water pollution indicators. The paper further highlights the potential bias in water quality assessments due to this temperature-dissolved oxygen relationship, leading to the overestimation of water toxicity in hot environments. The study recommends revising water quality standards to account for this correlation and suggests using dissolved oxygen saturation or concentration as indicators based on the purpose of the water source. The research underscores the crucial role of climate change in water quality management and has significant implications for sustainable development goals, emphasizing the need for integrated solutions. This paper contributes to understanding climate change’s impact on water quality and offers valuable insights for policymakers and environmental conservation efforts.

Publication in Chinese

  1. “Mandate-based and Market-based Policies: Comparative Analyses on Carbon Mitigation Effectiveness of China’s Climate Policies” (with Pengsheng Lin), The Journal of World Economy, 2024,47(6):149-175.
    2. 林鹏昇,李硕（通讯作者）. 行政手段与市场机制: 中国气候政策碳减排效果的比较[J]. 世界经济,2024, 47(6):149-175.
  2. “Effects of improved air quality on household consumption: empirical evidence from China Family Panel Studies” (with Min Wang), China Population, Resources and Environment, 2023,33(10):24-34.
    3. 李硕,王敏（通讯作者）.空气质量改善对居民消费的影响[J].中国人口·资源与环境,2023,33(10):24-34.
  3. “Trends in China’s surface water quality and control policy solutions” (with Ding Ma), China Population, Resources and Environment, 2023,33(05):27-39.
    4. 马丁,李硕（通讯作者）.中国地表水水质变化趋势及治理政策应对[J].中国人口·资源与环境,2023,33(05):27-39.
  4. “Environmental Inspection and Firm Entry: Evidence from Firm Registration Data” (with Min Wang and Dandan Zhang), The Journal of World Economy, 2022,45(01):110-132.
    5. 李硕,王敏,张丹丹（通讯作者）.中央环保督察和企业进入:来自企业注册数据的证据[J].世界经济,2022,45(01):110-132.