Who Counts in Evaluating the Effects of Air Pollution Policies on Households? Non-Market Valuation in the Presence of Dependencies

42 Pages Posted: 30 Sep 2009

See all articles by Mary F. Evans

Mary F. Evans

Claremont McKenna College - Robert Day School of Economics and Finance

Christine Poulos

RTI International - Headquarters - Research Triangle Park

V. Kerry Smith

Arizona State University (ASU) - Economics Department; National Bureau of Economic Research (NBER)

Date Written: August 21, 2009

Abstract

Individuals who are likely to realize the largest benefits from improvements in air quality often depend on other members of their households to make time or monetary contributions to their care. The presence of these dependency relationships among household members poses challenges for benefit estimation since it is unlikely that the conditions necessary for recovering the underlying individual preferences from household choices are satisfied in this setting. We propose a conceptual framework that highlights the role of these dependencies in the choice models used to estimate the willingness to pay for environmental quality improvements. We design a complementary stated preference survey that describes hypothetical dependency relationships for household members of different ages to test the implications of our conceptual model. Respondents’ choices take into account the care-giving responsibilities for young children and teenagers but not for older adults.

Keywords: dependency relationships, air quality, household behavior

JEL Classification: D1, Q51, Q53

Suggested Citation

Evans, Mary F. and Poulos, Christine and Smith, V. Kerry, Who Counts in Evaluating the Effects of Air Pollution Policies on Households? Non-Market Valuation in the Presence of Dependencies (August 21, 2009). Robert Day School of Economics and Finance Research Paper No. 2009-15, Available at SSRN: https://ssrn.com/abstract=1479830 or http://dx.doi.org/10.2139/ssrn.1479830

Mary F. Evans (Contact Author)

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States
909.607.3423 (Phone)

Christine Poulos

RTI International - Headquarters - Research Triangle Park ( email )

3040 Cornwallis Road
P.O. Box 12194
Research Triangle Park, NC 27709
United States

V. Kerry Smith

Arizona State University (ASU) - Economics Department ( email )

Tempe, AZ 85287-3806
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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