The Environmental and Distributional Impacts of Stimulus Policy, with Yu Luo, Ming-ang Zhang & Hui Zhou. Submitted.

Abstract: This paper examines the environmental and distributional impacts of a fiscal stimulus in China: the 2015 vehicle purchase tax cut for small-engine cars. Leveraging spatial and time-shifted difference-in-differences designs, we find that the policy significantly increased air pollution, particularly near main roads. Although it encouraged a shift toward smaller vehicles, the resulting surge in total car ownership led to higher overall pollution. Real-time congestion indices and citizen complaints indicate worsening traffic conditions, suggesting that congestion-related inefficiencies further amplified emissions. Using transaction-level data from the secondary housing market, we show that housing prices declined more in residential complexes near main roads—typically home to more economically vulnerable households—with larger effects in lower-priced neighborhoods. Our findings highlight the unintended environmental and distributional consequences of durable-goods stimulus policies, underscoring the need to align fiscal tools with sustainability and equity goals.

Conservatism, Solo-Authored.

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少壮派, Solo-Authored.

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Accountability, Solo-Authored.

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Forests, with Mingyu Shu.

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