When bad air becomes bad economics

HAZE does not just make the air unhealthy; it changes how people spend, where they go, and how businesses operate.

The economic ripple effect is clear: poor air quality keeps people indoors, reduces footfall and outdoor activity, disrupts work, and raises operating costs – putting pressure on revenues and, ultimately, profits.

A decline in footfall quickly becomes a decline in sales, while rent, wages and utilities continue to accumulate.

Delivery platforms and restaurants with strong takeaway operations, however, could capture some of the spending that shifts from dine-in to home consumption.

The same behavioural shift can ripple through the wider consumer economy.

Shopping malls, cinemas, entertainment venues, outdoor attractions and tourism operators depend on people moving around and spending.

The second ripple effect is business disruption.

Poor visibility can affect transport and logistics, while unhealthy air can restrict construction and other outdoor activities.

Companies may have to adjust operations or spend more on protective measures.

These costs can squeeze margins even if demand remains relatively stable.

The third is productivity.

Haze can mean more employees taking sick leave, working from home, or experiencing reduced concentration.

Employers may face higher spending on air filtration, workplace safety and health support, alongside fewer productive hours.

There are businesses that can benefit. Demand for masks, air purifiers, filters and healthcare services can rise, while food delivery may gain as consumers stay indoors.

But these gains are concentrated in specific segments and may not compensate for weaker activity elsewhere.

This is why the economic impact of haze should not be measured simply by asking whether businesses are open.

The more important questions are: Are customers still coming? Are workers still productive? Are companies facing higher costs? And is spending merely being postponed or lost altogether?

Governments need to treat prolonged haze as an economic disruption and build faster-response mechanisms around it – including timely air-quality information, clear workplace and outdoor-activity guidelines, support for affected small businesses where disruption is severe, and stronger enforcement and regional cooperation to address the sources of recurring haze.

The objective should not be to cushion every business from every bad-air day.

It is to reduce the economic damage when haze becomes prolonged or severe.

Because the longer the haze lasts, the more it moves from being a public-health problem to becoming a consumption, productivity and business-cost problem – and that eventually becomes an economic policy problem.