Unintended negative impact of environmental regulation on public safety: Evidence from China

Abstract

This paper investigates the unintended effect of air pollution regulations on public safety. Based on a city-level panel data set, we document first evidence of the causal relationship between environmental regulations and crime rate, using difference-in-differences approach. Specifically, we find that the well-known “2+26” work plan of air pollution control for Beijing–Tianjin–Hebei Atmospheric Pollution Transmission Corridor increased the incidence of intentional injury, provocation and troublemaking, dangerous driving, theft, and robbery in a statistical sense. Regarding the underlying mechanism, environmental regulations may cause substantial job displacement, which in turn triggers negative emotions and psychological distress, ultimately increasing both economically motivated and emotionally driven crimes. Our empirical results imply extra social cost of environmental regulations, which has been mostly overlooked in the literature.