Abstract
I investigate how air pollution affects economic activity. Using over 37 billion phone-location-based foot traffic data points from SafeGraph, I conduct a large-scale analysis to examine the causal effect of air pollution on activity patterns across the United States. Using changes in local wind direction as an instrument for air pollution, I characterize the dynamic response to pollution exposure. I find that PM2.5 reduces economic activity in both the short and medium run, with effects persisting for up to two weeks before partially rebounding. The reductions are widespread across different economic sectors, with recreational activities experiencing the largest decline. The effect is more pronounced in higher-income counties and areas with larger shares of children, suggesting greater awareness among wealthier or more vulnerable populations.