Air Pollution and Online Lender Behavior: Evidence from Chinese Peer-to-Peer Lending Market

This paper examines the effect of air pollution on individual lender’s decisions. Using unique data from the leading peer-to-peer lending platform, we find evidence that for every 10 units increase in the AQI index, the lender would lend RMB 5.47 yuan more in one single bid and 6% earlier in the fund-raising period. Moreover, the impacts from PM2.5 and CO pollutants are serious, and the elderly people or people that are not highly educated would suffer more. We further explore three possible channels: physical channel, physiological channel as well as psychological channel, and confirm that the first two are valid. Overall, our findings shed light on the influence of environmental factors on the decisions of online lenders.