Speaker
Description
Electric vehicles (EVs) are recognized as a feasible solution for improving the environment, and environmental factors may also affect the adoption of EVs.
However, there is a limited body of literature exploring the impact of environmental factors on the actual sales of EVs based on real-world air quality data. Previous research, primarily conducted through surveys, indicates that environmental awareness promotes the intention to adopt EVs. These survey-based research tend to focus on the intention to adopt EVs rather than actual purchase behavior. It is worth pointing out that previous studies found that when surveying people's views on environmental topics, respondents often exhibit a pronounced inclination to overstate their engagement in environmentally responsible actions. This emphasizes the importance of exploring the effect of actual air quality on the actual sale volumes of EVs. In addition, the promotion of EVs would improve air quality, leading to an apparent issue of reverse causality in their relationship. However, previous studies have focused on the correlation of their relationship rather than causality.
Hence, compiling a panel dataset encompassing 271 Chinese cities from 2014 to 2020, this study employs an instrumental variables approach and a two-way fixed effects panel model to investigate the causal effects of air quality on EV sales. Thermal inversion is employed as an instrumental variable to address endogeneity arising from the obvious reverse causality in their relationship.
Several valuable findings are as follows: (1) Each one percent deterioration in air quality, represented by a one percent increase in air quality index, results in a 9.15 percent increase in EV sales; (2) Heterogeneity analysis suggests that the positive effect of air quality on EV sales is more pronounced in cities with higher per capita disposable incomes, higher per capita vehicle ownership, and larger size; (3) Mechanism analysis shows that the positive effect of air pollution on the sales of EVs is mediated by two factors: individual environmental awareness and government policy-induced behavior.
Our findings contribute to a more comprehensive understanding of the role that environmental factors play in the growth of the EV market and provide valuable insights for further advancing the promotion of EVs in different types of cities.
| Keywords | Air pollution; Electric vehicle sales; Instrumental variable; Causality; China |
|---|---|
| Best Congress Paper Award | Yes |
