The Economic Value of Air-Pollution-Related Health Risks in China: A Contingent Valuation Study

Abstract:     
The economic value of preventing adverse health effects related to air pollution is estimated using contingent valuation in three diverse locations in China. Values are estimated for three health endpoints: cold, chronic bronchitis, and fatality. Alternative statistical models are tested to study their impact on estimated willingness to pay (WTP) and on the relationship between WTP and respondent characteristics. Using the official exchange rate, the sample-average median WTP to prevent an episode of cold ranges between US$3 and US$6, the WTP to prevent a statistical case of chronic bronchitis ranges between US$500 and US$1,000, and the value per statistical life ranges between US$4,000 and US$17,000. Estimated mean values are between two and thirteen times larger. Our estimates are between about 10 and 1,000 times smaller than estimates for the US and Taiwan using official exchange rates. Indoor air quality, measured for a subset of respondents, shows no consistent relationship with WTP.

Number of Pages in PDF File: 32

Keywords: Willingness to pay, value per statistical life, air pollution, China, mixture model, two-part model

JEL Classification: D61, H4, I18, J17, K32, L51, O13, Q25

Accepted Paper Series