Missing repayments on haze days: Evidence from China

• 成果类型: Article
• 署名作者: Li, Jianwen; Li, Keyang; Ren, Yuan
• 署名单位: Shandong University; University of International Business & Economics; Zhejiang University; Zhejiang University
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2025.103491
• 发表日期: 2025
• 关键词: Air pollution; household finance; Financial mistake; CHINA

摘要

This study examines the impact of air pollution on a universal financial decision that is cognitively less demanding. Based on 281,314 repayment records from a leading P2P lending platform in China, we find that borrowers are more likely to miss their repayments when the scheduled repayment days witness heavier air pollution. A deterioration of air quality from excellent to severely polluted is associated with an instantaneous and transitory increase in delinquency rate by 143.3 basis points (11.3%). Instrumental variable estimates based on pollution transport via wind or thermal inversion show similar results. Our findings are consistent with air pollution prompting borrowers to forget their repayment obligations, which do not indicate financial distress. However, pollution-induced delinquencies reduce borrowers' credit ratings and success rates of future loan applications, with the effect being as large as that due to delinquencies unlikely to be driven by pollution, implying a misallocation of credit.