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The Health and Visibility Cost of Air Pollution: A Comparison of Estimation Methods

  • Delucchi, Mark
  • Murphy, James
  • McCubbin, Donald

Abstract Air pollution from motor vehicles, electricity-generating plants, industry, and other sources can harm human health, injure crops and forests, damage building materials, and impair visibility. Economists sometimes analyze the social cost of these impacts, in order to illuminate tradeoffs, compare alternatives, and promote efficient use of scarce resource. In this paper, we compare estimates of the health and visibility costs of air pollution derived from a meta-hedonic price analysis, with an estimate of health costs derived from a damage-function analysis and an estimate of the visibility cost derived from contingent valuation. We find that the meta-hedonic price analysis produces an estimate of the health cost that lies at the low end of the range of damage-function estimates. This is consistent with hypotheses that on the one hand, hedonic price analysis does not capture all of the health costs of air pollution (because individuals may not be fully informed about all of the health effects), and that on the other hand, the value of mortality used in the high-end damage function estimates is too high. The analysis of the visibility cost of air pollution derived from a meta-hedonic price analysis produces an estimate that is essentially identical to an independent estimate based on contingent valuation. This close agreement lends some credence to the estimates. We then apply the meta hedonic-price model to estimate the visibility cost per kilogram of motor vehicle emissions.

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Paper provided by Institute of Transportation Studies, UC Davis in its series Institute of Transportation Studies, Working Paper Series with number qt03s2x9xb.

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Date of creation: 01 Feb 2002
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Handle: RePEc:cdl:itsdav:qt03s2x9xb
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  1. Schwing, Richard C. & Southworth, Bradford W. & Von Buseck, Calvin R. & Jackson, Clement J., 1980. "Benefit-cost analysis of automotive emission reductions," Journal of Environmental Economics and Management, Elsevier, vol. 7(1), pages 44-64, March.
  2. Murphy, James & Delucchi, Mark, 1998. "A Review of the Literature on the Social Cost of Motor Vehicle Use in the United States," Institute of Transportation Studies, Working Paper Series qt1tk1s936, Institute of Transportation Studies, UC Davis.
  3. Kazimi, Camilla, 1997. "Evaluating the Environmental Impact of Alternative-Fuel Vehicles," Journal of Environmental Economics and Management, Elsevier, vol. 33(2), pages 163-185, June.
  4. Johannesson, Magnus & Johansson, Per-Olov, 1997. "Quality of life and the WTP for an increased life expectancy at an advanced age," Journal of Public Economics, Elsevier, vol. 65(2), pages 219-228, August.
  5. Murphy, James & Delucchi, Mark & McCubbin, Donald & Kim, H.J., 1999. "The Cost of Crop Damage Caused by Ozone Air Pollution From Motor Vehicles," Institute of Transportation Studies, Working Paper Series qt4cv6x16h, Institute of Transportation Studies, UC Davis.
  6. Harrison, David Jr. & Rubinfeld, Daniel L., 1978. "Hedonic housing prices and the demand for clean air," Journal of Environmental Economics and Management, Elsevier, vol. 5(1), pages 81-102, March.
  7. Jones-Lee, M W & Hammerton, M & Philips, P R, 1985. "The Value of Safety: Results of a National Sample Survey," Economic Journal, Royal Economic Society, vol. 95(377), pages 49-72, March.
  8. Small, Kenneth A. & Kazimi, Camilla, 1995. "On the Costs of Air Pollution from Motor Vehicles," University of California Transportation Center, Working Papers qt0sx81025, University of California Transportation Center.
  9. McCubbin, Donald R. & Delucchi, Mark A., 1996. "The Social Cost of the Health Effects of Motor-Vehicle Air Pollution," University of California Transportation Center, Working Papers qt5jm6d2tc, University of California Transportation Center.
  10. Delucchi, Mark A. & Murphy, James & McCubbin, Donald R. & Kim, Jin, 1996. "The Cost of Reduced Visibility Due to Particulate Air Pollution From Motor Vehicles," University of California Transportation Center, Working Papers qt2n15b6gw, University of California Transportation Center.
  11. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
  12. Delucchi, Mark A. & McCubbin, Donald R., 1996. "The Contribution of Motor Vehicles and Other Sources to Ambient Air Pollution," University of California Transportation Center, Working Papers qt19b9s9qj, University of California Transportation Center.
  13. Jeffrey E. Zabel & Katherine A. Kiel, 2000. "Estimating the Demand for Air Quality in Four U.S. Cities," Land Economics, University of Wisconsin Press, vol. 76(2), pages 174-194.
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