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Valuing The Beneficts of Air Pollution Abatement Using a Health Production Function A Case Study of Panipat Thermal Power Station, India

  • Surender Kumar
  • D.N. Rao

    ()

The Indian economy today is highly prone to industrial pollution and ismaking compliance decisions in order to meet environmental standards.Environmental regulations impose significant costs upon industry that arefairly high and, therefore, require economic justification. This justificationcan be given by estimating the benefits associated with these costs. Whilethe scientific rationale behind air quality preservation is well understood,its economic rationale for a developing country like India, has to beverified. The objective of the present paper is to estimate the economicvalue that people in an urban area in India (Panipat Thermal Power Station(PTPS) Colony in Panipat, Haryana) place upon improving the air quality.The dose-response method, based on the Gerking and Stanley (1986) model,is used to estimate the economic benefits of air quality improvement. Theseestimates range from one to two percent of monthly income. Income andhealth status variables were significant determinants of peoples'willingness to pay (WTP) for air quality improvements. This lends supportto the neo-conventional wisdom `act now to protect the environment beforeit is too late'. These people are ready to pay for environmentalimprovements. We do believe, however, that the relatively successfulapplication of the dose response method at PTPS colony suggests that thetechnique can be more widely applied in developing countries like India. Copyright Kluwer Academic Publishers 2001

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Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 20 (2001)
Issue (Month): 2 (October)
Pages: 91-102

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Handle: RePEc:kap:enreec:v:20:y:2001:i:2:p:91-102
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  1. Harford, Jon D., 1984. "Averting behavior and the benefits of reduced soiling," Journal of Environmental Economics and Management, Elsevier, vol. 11(3), pages 296-302, September.
  2. Cropper, Maureen L. & Simon, Nathalie B. & Alberini, Anna & Sharma, P. K., 1997. "The health effects of air pollution in Delhi, India," Policy Research Working Paper Series 1860, The World Bank.
  3. Gerking, Shelby & Stanley, Linda R, 1986. "An Economic Analysis of Air Pollution and Health: The Case of St. Louis," The Review of Economics and Statistics, MIT Press, vol. 68(1), pages 115-21, February.
  4. KyeongAe Choe & Dale Whittington & Donald T. Lauria, 1996. "The Economic Benefits of Surface Water Quality Improvements in Developing Countries: A Case Study of Davao, Philippines," Land Economics, University of Wisconsin Press, vol. 72(4), pages 519-537.
  5. Shibata, Hirofumi & Winrich, J Steven, 1983. "Control of Pollution when the Offended Defend Themselves," Economica, London School of Economics and Political Science, vol. 50(200), pages 425-37, November.
  6. Courant, Paul N. & Porter, Richard C., 1981. "Averting expenditure and the cost of pollution," Journal of Environmental Economics and Management, Elsevier, vol. 8(4), pages 321-329, December.
  7. Mishan, E J, 1974. "What Is the Optimal Level of Pollution?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1287-99, Nov.-Dec..
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