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

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

Abstract

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.

Suggested Citation

  • Delucchi, Mark & Murphy, James & McCubbin, Donald, 2002. "The Health and Visibility Cost of Air Pollution: A Comparison of Estimation Methods," Institute of Transportation Studies, Working Paper Series qt03s2x9xb, Institute of Transportation Studies, UC Davis.
  • Handle: RePEc:cdl:itsdav:qt03s2x9xb
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    References listed on IDEAS

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    1. Delucchi, Mark A. & Murphy, James & Kim, Jin & McCubbin, Donald R., 1996. "The Cost of Crop Damage Caused by Ozone Air Pollution From Motor Vehicles," University of California Transportation Center, Working Papers qt1j6730td, University of California Transportation Center.
    2. 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.
    3. Small, K.A. & Kazimi, C., 1994. "On the Costs of Air Pollution from Motor Vehicules," Papers 94-95-3, California Irvine - School of Social Sciences.
    4. 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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    6. 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..
    7. 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.
    8. 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.
    9. 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.
    10. 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.
    11. 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.
    12. 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.
    13. 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.
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    Citations

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    Cited by:

    1. Mollard, A. & Rambonilaza, M. & Vollet, D., 2004. "Market structure and environmental amenities in hedonic pricing of rural cottages," Working Papers 200427, Grenoble Applied Economics Laboratory (GAEL).
    2. Wang, Guihua, 2008. "Lifecycle Analysis of Air Quality Impacts of Hydrogen and Gasoline Transportation Fuel Pathways," Institute of Transportation Studies, Working Paper Series qt41x6t130, Institute of Transportation Studies, UC Davis.
    3. Delucchi, Mark A. & McCubbin, Donald R., 2010. "External Costs of Transport in the U.S," Institute of Transportation Studies, Working Paper Series qt13n8v8gq, Institute of Transportation Studies, UC Davis.
    4. Eva Kougea & Phoebe Koundouri, "undated". "Air Quality Degradation: Can economics help in measuring its welfare effects? A Review of Economic Valuation Studies," DEOS Working Papers 1129, Athens University of Economics and Business.
    5. Fu, Shihe & Gu, Yizhen, 2017. "Highway toll and air pollution: Evidence from Chinese cities," Journal of Environmental Economics and Management, Elsevier, vol. 83(C), pages 32-49.
    6. Montero, José María & Larraz, Beatriz & Chasco, Coro, 2008. "Building an Environmental Quality Index for a big city: a spatial interpolation approach with DP2," MPRA Paper 10736, University Library of Munich, Germany.
    7. José-María Montero & Coro Chasco & Beatriz Larraz, 2010. "Building an environmental quality index for a big city: a spatial interpolation approach combined with a distance indicator," Journal of Geographical Systems, Springer, vol. 12(4), pages 435-459, December.
    8. Mapemba, Lawrence D. & Epplin, Francis M. & Huhnke, Raymond L., 2006. "Environmental Consequences of Ethanol from Corn Grain, Ethanol from Lignocellulosic Biomass, and Conventional Gasoline," 2006 Annual meeting, July 23-26, Long Beach, CA 21034, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Athukorala, Wasantha, 2012. "Health Benefits and Industrial Air Pollution: A Comparison between People’s Willingness to Accept and the Opportunity Cost of Health Risk," Sri Lankan Journal of Agricultural Economics, Sri Lanka Agricultural Economics Association (SAEA), vol. 14.
    10. Muthukrishnan, Subhashini, 2010. "Vehicle ownership and usage charges," Transport Policy, Elsevier, vol. 17(6), pages 398-408, November.

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