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WILLINGNESS TO PAY FOR AIR QUALITY: THE CASE OF OUTDOOR EXERCISE
Author(s) -
FARBER STEPHEN,
RAMBALDI ALICIA
Publication year - 1993
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.1993.tb00398.x
Subject(s) - willingness to pay , contingent valuation , agricultural economics , air quality index , valuation (finance) , household income , econometric model , economics , socioeconomics , geography , demography , statistics , econometrics , mathematics , meteorology , archaeology , finance , sociology , microeconomics
This study uses a contingent valuation (CV) survey to establish a sample of outdoor exercisers' willingness to pay (WTP) for ambient air quality improvements in East Baton Rouge parish, Louisiana. Estimated annual median and mean WTP values are £95 and £191, respectively, per person per year for assurance that ozone levels would not become “unhealthful” on any day. The survey informed respondents that in the prior year the local community experienced 14 days on which ozone levels exceeded federal standards. The study makes the strong assumptions that respondents believed they were “buying” 14 more healthy days and that WTP per day “bought” is constant. Given these assumptions, one can scale this WTP response to represent annual medians and means of approximately £7 and £14 per person per day, respectively. An econometric procedure for generalizing the community's annual WTP to avoid the 14 unhealthful days yields estimates ranging from £3.21 and £5.36 per person per healthy day, or between £12.4 and £20.6 million per year. The unit day estimates are comparable to CV and household production finction estimates of WTP in the Los Angeles basin, suggesting their usefulness for benefits transfer .