How Much do We Care about Air Quality Improvements? Evidence from Italian Households Data
AbstractThe purpose of this study is to identify the drivers of the Willingness to Pay (WTP) for air quality improvements in Italy. A better understanding of which factors, besides income, influence the willingness to pay for air quality improvements is important to guide future air quality policy. We estimate the WTP for air quality improvements in Italy using a novel approach (Ebert, 2007) and a unique dataset obtained by merging data on Italian households’ monthly current expenditure and information on a bundle of air pollutants’ concentrations. We find a WTP for air quality improvements between 2 and 10 Euros/month per household. We then consider how WTP varies by location of the household, the level of air quality and over time. We find higher WTP values for the Northwest and the Centre of Italy where the big metropolitan areas are located. We also observe that the WTP for air quality improvements declines as the level of air quality improves. Finally, the value of improvements in air quality decreases over time, maybe signaling a change of preferences.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 674.
Date of creation: May 2013
Date of revision:
Willingness to Pay; Air Quality Improvements; Demand Systems;
Find related papers by JEL classification:
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-05-11 (All new papers)
- NEP-ENE-2013-05-11 (Energy Economics)
- NEP-ENV-2013-05-11 (Environmental Economics)
- NEP-EUR-2013-05-11 (Microeconomic European Issues)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lindhjem, Henrik, 2007.
"20 years of stated preference valuation of non-timber benefits from Fennoscandian forests: A meta-analysis,"
Journal of Forest Economics,
Elsevier, vol. 12(4), pages 251-277, February.
- Lindhjem, Henrik, 2006. "20 years of stated preference valuation of non-timber benefits from Fennoscandian forests: A meta-analysis," MPRA Paper 11467, University Library of Munich, Germany.
- Jette Jacobsen & Nick Hanley, 2009.
"Are There Income Effects on Global Willingness to Pay for Biodiversity Conservation?,"
Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 43(2), pages 137-160, June.
- Hanley, Nicholas & Jacobsen, Jette Bredahl, 2008. "Are there income effects on global willingness to pay for biodiversity conservation?," Stirling Economics Discussion Papers 2008-03, University of Stirling, Division of Economics.
- Ebert, Udo, 2007. "Revealed preference and household production," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 276-289, March.
- Bergmann, Ariel & Hanley, Nick & Wright, Robert, 2006. "Valuing the attributes of renewable energy investments," Energy Policy, Elsevier, vol. 34(9), pages 1004-1014, June.
- Wiser, Ryan H., 2007. "Using contingent valuation to explore willingness to pay for renewable energy: A comparison of collective and voluntary payment vehicles," Ecological Economics, Elsevier, vol. 62(3-4), pages 419-432, May.
- Fabrizio Balli & Silvia Tiezzi, 2010. "Equivalence scales, the cost of children and household consumption patterns in Italy," Review of Economics of the Household, Springer, vol. 8(4), pages 527-549, December.
- Li Chuan-Zhong & Mattsson Leif, 1995. "Discrete Choice under Preference Uncertainty: An Improved Structural Model for Contingent Valuation," Journal of Environmental Economics and Management, Elsevier, vol. 28(2), pages 256-269, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fabrizio Becatti).
If references are entirely missing, you can add them using this form.