The effects of subway openings on air quality: evidence from China

This paper examines a causal relationship between the opening of a city's subway system and its air quality by exploiting daily data on prefecture-level cities in China from 2000 to 2012. Using multi-period difference in differences (DID) method, we find that air quality can be significantly improved following a subway system opening. Robustness tests support the fundamental empirical results. Heterogeneity analysis shows that cities in the eastern and western regions and cities with higher GDP or cities with larger population experience greater and more significant reduction in pollution. We further find that the air pollution continues to decrease with the extension and prolonged operating period of a subway system. Mechanism analysis shows that the resulted air pollution index (API) reduction is due to the substitution effect of taxi.