The Value of Information Disclosure : Evidence from Mask Consumption in China

We study the effect of information provision on avoidance behavior, using China's staggered roll-out of air pollution information and a unique dataset of high-frequency mask purchase transactions. Employing a generalized difference-in-differences approach, we estimate that the provision of air pollution information increases expenditures on PM2.5 respirators by 32%, which is mainly driven by improved information quality and the addition of PM2.5 index. The effect is enhanced by increased attention to pollution alerts and it is more pronounced during heavily polluted days. Our results shed light on the benefits of information provision through inducing avoidance behavior to reduce air pollution exposure