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Valuing Air Quality Using Happiness Data: The Case of China

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Listed:
  • Zhang, Xin

    (Beijing Normal University)

  • Zhang, Xiaobo

    (Peking University)

  • Chen, Xi

    (Yale University)

Abstract

This paper estimates the monetary value of cutting PM2.5, a dominant source of air pollution in China. By matching hedonic happiness in a nationally representative survey with daily air quality data according to exact dates and locations of interviews in China, we are able to estimate the relationship between local concentration of particulate matter and individual happiness. By holding happiness constant, we calculate the tradeoff between the reduction in particulate matter and income, essentially a happiness-based measure of willingness-to-pay for mitigating air pollution. We find that people on average are willing to pay ¥539 ($88, or 3.8% of annual household per capita income) for a 1 ?g/m3 reduction in PM2.5 per year per person.

Suggested Citation

  • Zhang, Xin & Zhang, Xiaobo & Chen, Xi, 2016. "Valuing Air Quality Using Happiness Data: The Case of China," IZA Discussion Papers 10028, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10028
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    More about this item

    Keywords

    air pollution; hedonic happiness; willingness to pay; China;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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