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Willingness to pay for improved air quality in Sweden

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  • Fredrik Carlsson
  • Olof Johansson-Stenman

Abstract

The aim of the paper is to quantify individual willingness-to-pay measures of improved air quality in Sweden by using the Contingent Valuation Method (CVM). Such measures are important for policy makers when deciding about public investments and policy instruments in order to regulate environmental impacts, e.g. from road transportation and industry. The mean willingness to pay (WTP) for a 50% reduction of harmful substances where the respondents live and work was about 2000 SEK/year, which is of the same order of magnitude as earlier stated preference studies in Nordic countries. Most parameters in the econometric analysis had the expected sign. WTP was increasing in income, wealth and education; it was larger for men, members of environmental organizations, people living in big cities (which are on average more polluted), and people who own their house or apartment. It was lower for retired people. However, the additional WTP for people in big cities, although significantly higher than for other people, was lower than expected, indicating a possible insensitivity-to-scope effect.

Suggested Citation

  • Fredrik Carlsson & Olof Johansson-Stenman, 2000. "Willingness to pay for improved air quality in Sweden," Applied Economics, Taylor & Francis Journals, vol. 32(6), pages 661-669.
  • Handle: RePEc:taf:applec:v:32:y:2000:i:6:p:661-669
    DOI: 10.1080/000368400322273
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    References listed on IDEAS

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    1. Strand, J. & Taraldset, A., 1991. "The Valuation of Environmental Goods in Norway: A Contingent Valuation Study with Multiple Bias Testing," Memorandum 02/1991, Oslo University, Department of Economics.
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