Is the Income Elasticity of the Willingness to Pay for Pollution Control Constant?

How willingness to pay for environmental quality changes as incomes rise is a central question in several areas of environmental economics. This paper explores both theoretically and empirically whether or not the willingness to pay (WTP) for pollution control varies with income. Our model indicates that the income elasticity of the marginal WTP for pollution reduction is only constant under very restrictive conditions. Our empirical analysis tests the null hypothesis that the elasticity of the WTP for pollution control with respect to income is constant, employing a multi-country contingent valuation study of eutrophication reduction in the Baltic Sea. Our findings reject this hypothesis, and estimate an income elasticity of the WTP for eutrophication control of 0.1–0.2 for low-income respondents and 0.6–0.7 for high-income respondents. Thus, our empirical results suggest that the elasticity is not constant but is always less than one. This has implications for how benefits transfer exercises, and for theoretical explanations of the environmental Kuznets curve.     

Does economic growth and energy consumption drive environmental degradation in China’s 31 provinces? New evidence from a spatial econometric perspective

The panel data analysis points to economic and social factors contributing to NO_x, PM_2.5, PM₁₀, SO₂, and VOCs in China’s 31 provinces. The spatial correlation analysis using Global and Local Moran’s I values indicates the existence of a significant and positive spatial autocorrelation with respect to environment, economy and energy, and the high spatial correlation is evident in the eastern region, covering the northern part of Yangtze River Delta, Huaihai Economic Zone, and the lower reaches of the Yellow River Economic Belt. The empirical estimation is performed through spatial lag and spatial Durbin models. All emitted air pollutants in 31 provinces have significant spatial dependence and strong spillover effects. There is an inverted U-shaped relationship between emitted air pollutants (NO_x, PM₁₀, VOCs, and PM_2.5) and per capita GDP, which follows the EKC hypothesis. The relationship between SO₂ and per capita GDP does not follow the EKC hypothesis. There is a positive relationship between pollutant emissions and coal consumption, which is consistent with current studies for various countries like Canada, Denmark, UK and US and regions like New York State. However, the effects of science and technology investment on air pollutants are mostly positive, which is not as policy expected.     

Effectiveness of air pollution standards in reducing mortality in India

India experiences some of the highest air pollution levels globally, with 13 of the 20 most polluted cities in the world. In this paper, we estimate the relationship between air pollution policies in India and mortality for people of all ages and all causes. We estimate the relationship between mortality and two major air pollution regulations, the Supreme Court Action Plan (SCAP) and the Catalytic Converter (CC) policy. Although data for mortality in India have improved over time, the annual average mortality for many districts is volatile, with many outliers and missing values. After addressing these measurement issues in a difference-in-differences setup, we do not find evidence that the policies were effective in significantly reducing mortality. In an effort to understand the potential benefits of reducing pollution levels in India, we investigate the association of different pollution types with mortality. This analysis relies upon relatively recent satellite data on PM_2.5 levels in India. We examine this relationship for India for the first time, using a fixed effects model in an attempt to address issues of endogeneity and measurement error. We find that PM_2.5 levels are positively associated with mortality, with a 10% increase in pollution conditionally associated with a 2.0% increase in the mortality rate.     

Air Pollution and Sick-leaves

During the last decade an increasing amount of studies have investigatedthe relationship between air pollution and human health effects. In thisstudy we investigate how these effects in turn induce reduced labourproductivity in terms of sick-leaves, which is an important factor inassessment of air pollution costs in urban areas. For this purpose weemploy a logit model along with data on sick-leaves from a large office inOslo and different air pollutants. Our results indicate that sick-leaves aresignificantly associated with particulate matter (PM₁₀), while theassociations with SO₂ and NO₂, are more ambiguous. We also tryto estimate the induced social costs in terms of lost labour productivity andincreased governmental expenditures, although these estimates are moreuncertain.     

Cost Benefit Analysis of European Air Quality Targets for Sulphur Dioxide, Nitrogen Dioxide and Fine and Suspended Particulate Matter in Cities

The European Commission has proposed air quality standards for NO₂, SO₂ and PM₁₀ to be in force by 2010. The present paper presents a study that gauged their costs and benefits. An analysis of the expected emissions for 2010 (reference emission scenario), using simplified air quality models, showed that non-compliance with these standards will occur in cities only, not in rural areas. Most compliance problems are expected for PM₁₀, least for SO₂. Central estimates of the costs to meet standards range from 21 MECU (SO₂), to 79 MECU (NO₂) to 87--225 MECU (PM₁₀). The estimated benefits are 83--3783 MECU (SO₂), 408--5900 MECU (NO₂), and 5007--51247 MECU (PM₁₀). Uncertainties are high, due to errors and incertitude in various steps of the methodology, mainly the estimation of the human health effects, in particular effects on mortality, and in the valuation of a statistical life. In the case of PM₁₀, additional uncertainty results from the small size of the air quality database. Notwithstanding the uncertainties, the indications are that the benefits exceed the costs.     

The effects of haze pollution on stock performances: evidence from China

Haze pollution has become the most important environmental issue in China in recent years. Using the data of PM_2.5 concentration and stocks of listed companies located in Beijing between 2010 and 2014, this article investigates the effects of haze pollution on stock performances. Empirical results indicate that haze pollution has significant negative effects on stock returns and significant positive effects on stock volatilities, through the channel of investors’ mood. Furthermore, the effects of haze pollution on stock returns emerge gradually and the effects of haze pollution on stock volatilities weaken gradually over time during a trading day.     

WTO accession,trade expansion,and air pollution: Evidence from China’s county‐level panel data

This study provides evidence that trade expansion has contributed to the degradation of air pollution in China. On the basis of different responses of counties’ trade to China's World Trade Organization accession at the end of 2001, we exploit air pollution data from NASA to construct a difference‐in‐differences predicted trade as an instrument for our identification. We document statistically significant and robust evidence on trade expansion, which accounts for approximately 60% and 20% for the increase of PM_2.5 and SO₂, respectively, in China. Findings on trade pollution relation are robust to various tests. Deterioration in the environment is mainly driven by scale and trade in polluting sectors.     

Causality between income and emission: a country group-specific econometric analysis

Empirical studies of the Environmental Kuznets Curve (EKC) examine the presence or otherwise of an inverted U-shaped relationship between the level of pollution and the level of income. Customarily, in the diagram of EKC the level of income is shown on the horizontal axis and that of pollution on the vertical axis. Thus, it is presumed that the relationship between income and pollution is one of unidirectional causality with income causing environmental changes and not vice versa. The validity of this presumption is now being questioned. It is being asserted that the nature and direction of causality may vary from one country to the other. In this paper, we present the results of a study of income–CO₂ emission causality based on a Granger causality test to cross-country panel data on per capita income and the corresponding per capita CO₂ emission data. Briefly, our results indicate three different types of causality relationship holding for different country groups. For the developed country groups of North America and Western Europe (and also for Eastern Europe) the causality is found to run from emission to income. For the country groups of Central and South America, Oceania and Japan causality from income to emission is obtained. Finally, for the country groups of Asia and Africa the causality is found to be bi-directional. The regression equations estimated as part of the Granger causality test further suggest that for the country groups of North America and Western Europe the growth rate of emission has become stationary around a zero mean, and a shock in the growth rate of emission tends to generate a corresponding shock in the growth rate of income. In contrast, for the country groups of Central and South America, Oceania and Japan a shock in the income growth rate is likely to result in a corresponding shock in the growth rate of emission. Finally, causality being bi-directional for the country groups of Asia and Africa, the income and the emission growth rates seemed to reinforce each other.     

The Value of Clean Air in China： Evidence from Beijing and Shanghai

We estimate the willingness to pay （WTP） of Beijing and Shanghai residents for improving the air quality of the two cities from their levels prior to the 2008 Beijing Olympic Games to the level achieved during the Olympics. The data are obtained from a contingent valuation study conducted through face-to-face interviews in June 2008 in Beijing and Shanghai prior to the Beijing Olympics, during which time there was intensive debate about Beijing＇s air quality. Residents in both cities are willing to pay more when they are more exposed to air pollution, when their disposable income increases, and when they have stronger beliefs that public opinion plays an important role in government policy making. Beijing residents are willing to pay more than Shanghai residents, due possibly to Beijing＇s poorer air quality. Overall, aggregate WTP for air quality improvement accounts for about 0.53% of the 2008 GDP in Beijing and 0.22% of the 2008 GDP in Shanghai.     

城乡居民对水源地保护的支付意愿差异分析——以北京水源地为例

基于城乡比较的视角,利用调查数据,运用意愿调查法分析了城乡居民对水源地保护的支付意愿及其差异。研究结果显示:虽然农村居民的收入较低,但是农村居民对水源地保护的响应程度要高于城区居民,且农村居民对水源地保护的户均支付意愿也高于城区居民,但农村居民的总支付意愿比城区居民小;从支付意愿的影响因素来看,城区居民与农村居民并没有表现出明显的差异性,即均表现为受教育程度、家庭收入对支付意愿有显著的正向影响,而年龄对支付意愿有显著的负向影响;从拒绝支付的理由来看,绝大多数农村居民拒绝支付的主要原因是收入低、没有能力支付,而超过半数的城区居民认为水源地保护是政府、自来水公司等其他主体的责任。     

公益林生态效益价值居民支付意愿实证分析——以贵阳市为例

以贵阳市公益林为研究对象,采用条件价值评估法（CVM）,通过设计问卷、调查实施,对贵阳市居民公益林补偿的支付意愿（WTP）及影响因素进行了分析。结果显示：（1）73.6%贵阳市居民家庭对公益林生态效益价值有支付意愿,平均意愿支付额为每户家庭每年人民币213.96元;（2）支付意愿受社会经济因素综合影响,其中年龄、收入水平及环境关注态度对支付意愿具有显著影响,是影响支付意愿的主要因素。在对居民支付意愿影响因素进行分析的基础上,提出了一些建议性政策。     

Public transit and air pollution: Evidence from Canadian transit strikes

Little is known about the causal impacts of public transit on local air pollution. Exploiting variation in transit availability resulting from transit strikes in 18 Canadian cities between 1974 and 2011, this study identifies the short-run effect of public transit on air pollution. Our findings indicate that transit leads to a 3.5 part per billion increase in nitrogen oxides while having no statistically significant effect on carbon monoxide or PM_2.5. Estimates are robust to a series of specification tests and magnitudes are consistent with a calibrated simulation model. Overall, the results suggest that expanding the current configuration of public transit in North American cities is unlikely to yield improvements in local air quality.     

WAREHOUSES,TRUCKS, AND PM2.5: HUMAN HEALTH AND LOGISTICS INDUSTRY GROWTH IN THE EASTERN INLAND EMPIRE

The eastern Inland Empire of Southern California has experienced dramatic growth of the logistics industry since 2000. This paper analyzes the air pollution implications of that expansion. It is found that truck traffic will generate significant air pollution, especially PM_2.5. The estimated excess mortality associated is 32–64 cases per year, with a combined excess mortality and morbidity value of $247–$455 million per year. This represents 44%–81% of the estimated wages generated by industry growth and $5 million–$9 million per distribution facility. These estimates suggest that policies should be developed to internalize those costs.     

VALUING HEALTH EFFECTS: THE CASE OF OZONE AND FINE PARTICLES IN SOUTHERN CALIFORNIA

This study presents a conservative estimate of the health benefits that would result from attainment of the federal ozone and fine particle (PM_2.5) standards in the South Coast Air Basin of southern California. A three‐stage approach is used that links pollution exposures to adverse health outcomes to economic values. The annual value of the aggregate health benefits approaches $500 million (with a range of $295–$646 million) for ozone and exceeds $21 billion (with a range of $12.85–$34.22 billion) for fine particles. Such results are useful to regulatory agencies and other policy makers when evaluating the merits of various air pollution reduction strategies. (JEL Q51, Q53)     

Willingness to Pay to Reduce Mortality Risks: Evidence from a Three-Country Contingent Valuation Study

Valuing a change in the risk of death is a key input into the calculation of the benefits of environmental policies that save lives. Typically such risks are monetized using the Value of a Statistical Life (VSL). Since the majority of the lives saved by environmental policies are those of older persons, there has been much recent debate about whether the VSL should be lower for the elderly to reflect their fewer remaining life years. We conducted a contingent valuation survey in the UK, Italy and France designed to answer this question. The survey was administered in these three countries following a standardized protocol. Our results suggest that the VSL is €1.022 million or €2.264 million, depending on whether we use median or mean WTP. The VSL is not significantly lower for older persons, but is higher for persons who have been admitted to a hospital or emergency room for cardiovascular and respiratory problems. Income is positively and significantly associated with WTP. The income elasticities of the WTP increase gradually with income levels and are between 0.15 and 0.5 for current income levels in EU countries. We use the responses to the WTP questions to estimate the value of an extension in remaining life expectancy. The value of a loss of one year’s life expectancy is €54,000 or €163,000.     

Contingent valuation of inhaled insulin: a Canadian perspective

Summary

The objective of this study was to assess the preference and willingness-to-pay (WTP) for inhaled insulin from a random sample of general public perspective in Ontario, Canada. This was carried out using a mail survey using the contingent valuation method. Significantly more respondents preferred inhaled insulin (n=114) over subcutaneous insulin (n=6; p<0.001). The mean monthly WTP for inhaled insulin was CAN$68.59 ± 44.65 (95% confidence interval CAN$58.87–78.07), significantly more than the average subcutaneous insulin cost in Ontario of CAN$50. The WTP for inhaled insulin in the diabetic subgroup was CAN$98.52 ± 48.57, which is significantly higher than that of the general public (p<0.001). Multiple regression analysis showed a strong association between respondents’ income and diagnosis of diabetes and their WTP for inhaled insulin (p<0.001). Major influencing factors were convenience and household budget. The results of this study suggest that the general public in Ontario prefer inhaled insulin and are willing to pay significantly more per month than the current cost of subcutaneous insulin.     

The income–pollution relationship and the role of income distribution: An analysis of Swedish household data

The main purpose of this study is to analyze the relationship between pollution and income at household level. The study is motivated by the recent literature emphasizing the importance of income distribution for the aggregate relation between pollution and income. The main findings from previous studies are that if the individual pollution–income relationship is non-linear, then aggregate pollution for, say, a whole country, will depend not only on average income, but also on how income is distributed. To achieve our objective we formulate a model for determining the choice of consumption of goods in different types of household. Furthermore we link the demand model to emission functions for various goods. The theoretical analysis shows that without imposing very restrictive assumptions on preferences and the emission functions, it is not possible to determine a priori the slope or the curvature of the pollution–income relation. The empirical analysis shows that, given the model used, the pollution–income relation has a positive slope in Sweden and is strictly concave for all three pollutants under study (CO₂, SO₂, NO_x), at least in the neighbourhood of the observed income for an average household. We also show that altering the prevailing income distribution, holding average income constant, will affect aggregate emissions in the sense that an equalization of incomes will give rise to an increase in emissions. One implication is then that the development of aggregate pollution due to growth depends not only on the income level, but also on how growth is distributed.     

Public-good valuation and intra-family allocation

I derive values of marginal changes in a public good for two-person households, measured alternatively by household member i’s willingness to pay (WTP) for the good on behalf of the household, WTP _i (H), or by the sum of individual WTP values across family members, WTP(C). Households are assumed to allocate their resources in efficient Nash bargains over private and common household goods. WTP _i (H) is then defined by trade-offs between the public good and the household good, and WTP(C) by trade-offs of between the public good and private goods. WTP _i (H) is found to be higher (lower) than WTP(C) when member i has a relatively high (low) marginal valuation of the public good, but tends on average to equal WTP(C). As a consequence, individuals tend to represent households correctly on average when questioned about the household’s WTP for a public good, even when they are purely selfish and answer truthfully. Adding all members’ WTP answers on behalf of the household then leads to double counting. Pure and paternalistic altruism (the latter attached to consumption of the public good) move each member’s WTP on behalf of the household closer to the true sum of individual WTP, but only paternalistic altruism raises this sum.      

Using a choice experiment to estimate the benefits of a reduction of externalities in urban areas with special focus on electrosmog

Traffic noise, air pollution and electromagnetic pollution (i.e. nonionizing radiation, also called electrosmog) are typical negative local externalities in urban areas. They are side effects of human and economic activities (e.g. road transport, telecommunication) and they affect individuals’ well being negatively without compensation. In recent years, the increased number of mobile phone antennas in residential areas, and thus the increased intensity of radiated power, has aroused public concern, discussions and protests. The view of an antenna is annoying an increasing number of inhabitants. In this article, the stated Choice Experiment (CE) is used to estimate the Willingness To Pay (WTP) residents in the cities of Zurich and Lugano place on the reduction of these three environmental loads. Estimation results reveal that there is a positive and significant WTP for a reduction of air pollution and traffic noise levels to those limit values fixed by the government. Respondents also show WTP for reducing electrosmog and removing mobile phone antennas from their view, however to a lesser extent. In addition, this is the first study that estimates the benefit of a reduction of electrosmog using a CE.     

森林资源生态价值支付意愿的实证分析——以“京津唐—承”区域为例

本文针对我国河北省承德市森林资源,以"京津唐—承"区域为研究对象,通过建立多元线性回归模型,分析了影响居民对森林资源生态价值支付意愿的诸多因素,并根据平均支付意愿对承德市森林资源生态价值及相关方的受益大小进行了估算。结果表明,承德市森林资源生态价值为163.27亿元,其中森林资源所在地承德市受益17.92亿元,占10.98%,周边区域京津唐3市受益145.35亿元,占89.02%。在众多因素中,收入、居住地以及对森林资源重要性的认识程度是影响居民对森林资源生态价值支付意愿大小的主要因素。