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The Demand for Air Quality: A Case study in Bogotá, Colombia

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  • Fernando Carriazo
  • John Alexander Gomez

Abstract

Using a (second stage) hedonic housing model, this paper identifies an inverse demand function for air quality in Bogota, the fourth most polluted city in Latin America (annual average of PM10 52 mg/m3). We use precipitation and distance to monitoring stations as instruments for pollution. We found that the monthly benefits of compliance with the U.S Environmental Pollution Agency standard (50 mg/m3 – annual average), and the far more stringent World Health Organization standard (20 mg/m3 – annual average) are U$7.12 and U$72.91per household respectively. Accordingly, these values represent about 1% and 8% of the average household income.

Suggested Citation

  • Fernando Carriazo & John Alexander Gomez, 2015. "The Demand for Air Quality: A Case study in Bogotá, Colombia," Documentos CEDE 14071, Universidad de los Andes, Facultad de Economía, CEDE.
    • Handle: RePEc:col:000089:014071
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    References listed on IDEAS

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