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Are land values related to ambient air pollution levels? Hedonic evidence from Mexico City

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  • Chakraborti, Lopamudra
  • Heres, David
  • Hernandez, Danae

Abstract

This article investigates whether residents of Mexico City value air quality. Our results suggest that air quality improvement in PM10 is equivalent to a marginal willingness to pay (MWTP) of US$440.31 per property for the period 2006–2013. The corresponding MWTP for PM2.5 is US$880.63, for O3 is US$623.78, and for SO2 is as much as US$2091.50. These estimates are considerably larger in magnitude compared to the few other studies in similar settings. As a percentage of annual household income, these represent 2.44 per cent for PM10, 4.88 per cent for PM2.5, 3.46 per cent for O3 and 11.59 per cent for SO2. Our estimates of land value–pollution elasticities for PM10 (−0.26 and − 0.58) are within range of hedonic estimates for total suspended particulate matter in US cities around the 1970s. The corresponding elasticities range from − 0.55 to − 0.84 for PM2.5, from − 0.06 to − 0.49 for O3 and from − 0.11 to − 0.34 for SO2.

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  • Chakraborti, Lopamudra & Heres, David & Hernandez, Danae, 2019. "Are land values related to ambient air pollution levels? Hedonic evidence from Mexico City," Environment and Development Economics, Cambridge University Press, vol. 24(3), pages 252-270, June.
    • Handle: RePEc:cup:endeec:v:24:y:2019:i:03:p:252-270_00
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    1. Matías Fontenla & M. Ben Goodwin & Fidel Gonzalez, 2019. "Pollution and the choice of where to work and live within Mexico City," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 28(1), pages 1-17, December.

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    More about this item

    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
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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