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Willingness to pay for clean air: Evidence from diesel vehicle registration restrictions in Japan

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  • Nishitateno, Shuhei
  • Burke, Paul J.

Abstract

This paper documents the effect of diesel vehicle registration restrictions introduced in Japan in 2001 in reducing suspended particulate matter (SPM) concentrations. The focus is on Aichi and Mie prefectures, home to a number of municipalities that were required to implement these restrictions in 2001. The paper then uses this intervention to estimate the causal effect of air pollution on land values. We obtain estimates of the elasticity of residential land prices with respect to SPM concentration of between −0.4 and −1.0. The revealed willingness to pay for the improvements in air quality induced by the intervention in Aichi and Mie is estimated at about US$7 billion. We also find evidence that net in-migration appears to be a key mechanism via which clean air was capitalized into higher land values. The results are robust to a number of estimation approaches and sample restrictions.

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  • Nishitateno, Shuhei & Burke, Paul J., 2021. "Willingness to pay for clean air: Evidence from diesel vehicle registration restrictions in Japan," Regional Science and Urban Economics, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:regeco:v:88:y:2021:i:c:s016604622100017x
    DOI: 10.1016/j.regsciurbeco.2021.103657
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    Cited by:

    1. Edoh Y. Amiran & Joni S. James Charles, 2021. "Reconciling revealed and stated measures for willingness to pay in recreation by building a probability model," Papers 2107.14343, arXiv.org.
    2. NISHITATENO Shuhei & Paul BURKE, 2022. "Effects of Low Emission Zones on Air Quality, New Vehicle Registrations, and Birthweights: Evidence from Japan," Discussion papers 22109, Research Institute of Economy, Trade and Industry (RIETI).
    3. NISHITATENO Shuhei & Paul J. BURKE & ARIMURA Toshi H., 2023. "Road Traffic Flow and Air Pollution Concentrations: Evidence from Japan," Discussion papers 23031, Research Institute of Economy, Trade and Industry (RIETI).
    4. Chao Zhang & Mimi Xiong & Xuehui Wei & Zongmin Lan, 2023. "Spatial heterogeneity of marginal willingness to pay for air quality in PM2.5: analysis of buyers’ housing price in Beijing through hedonic price, spatial regression, and quantile regression models," Asia-Pacific Journal of Regional Science, Springer, vol. 7(3), pages 697-720, September.

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    More about this item

    Keywords

    Vehicle registration restrictions; Urban air pollution; Hedonic pricing;
    All these keywords.

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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