Subjective perceptions versus objective outcomes: Assessing the impact of smart city pilots on environmental quality in China

Despite extensive research on the impact of policy on objective outcomes of performance, the effects on subjective perceptions remain relatively unexplored, yet these are critical in shaping public behaviors and influencing policy makings. To address this gap, we investigate the impact of China's smart city pilots on both objective and subjective environmental performance, examining the underlying mechanisms involved. The empirical illustration is based on rich micro-level data and a difference-in-differences approach. Our results suggest that smart city initiatives have a negative and statistically significant impact on pollution. This reduction is facilitated through the spread of digital technologies and the increased adoption of energy technologies. However, smart city initiatives also reinforce subjective perceptions of environmental degradation. We find that information transmission, measured using the level of educational attainment, internet use and migration, plays an important role in shaping these subjective perceptions. Our study contributes to the literature on smart cities and research on gaps between objective outcomes and subjective perceptions, as well as information transmission theories, while our results offer multiple policy implications.