The Impact of Land Misallocation and Urban Sprawl on Air Pollution : Evidence from Chinese Prefecture-Level Cities

Studies have found that air pollution increases with land misallocation, that is, industrial land is offered at low prices and in large quantities, while commercial/residential land at high price and in a restricted manner. We posit that urban sprawl is an important intermediate mechanism by which land misallocation affects air pollution. We then build a general equilibrium framework to analyze the internal mechanism shaping the three variables. Using detailed land market transaction data from the China Land Market website and LandScan Global Population Data, we construct a dataset of land misallocation and urban sprawl at the prefecture level and test the relationship between those two variables and air pollution by using mediation effect model. Our results indicate that land misallocation leads to an increase in air pollutant concentrations, and there is an inverted U-shaped relationship between urban sprawl and air pollution. Land misallocation has a nonlinear impact on air pollution by restraining urban sprawl. The impact of land misallocation and urban sprawl on air pollution is significantly heterogeneous when introducing the interaction between public transportation, transportation infrastructure, and land misallocation