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Hedonic valuation of marginal willingness to pay for air quality improvement

Author

Listed:
  • Endah Saptutyningsih
  • Agus Tri Basuki

    (Universitas Muhammadiyah Yogyakarta
    Universitas Muhammadiyah Yogyakarta)

Abstract

This study aims to identify the highest air pollution areas and to estimate household marginal willingness to pay for air quality improvement. The result of Kriging technique indicates that six sub districts in Yogyakarta City and one sub district in Gunungkidul have highest concentration of particle pollution (PM10). The result of hedonic price method conclude that by adopting a two-stage estimation procedure an 1% increase in the level of PM10 reduced property prices in the study area by 0.32%. Marginal implicit price for reducing PM10 is Rp 957,900.00. The households are willing to pay an additional amount of 1.34 percent for a reduction in PM10 by 1%.

Suggested Citation

  • Endah Saptutyningsih & Agus Tri Basuki, 2012. "Hedonic valuation of marginal willingness to pay for air quality improvement," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 4(2), pages 163-172, April.
    • Handle: RePEc:uii:journl:v:4:y:2012:i:2:p:163-172
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    References listed on IDEAS

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    1. repec:ind:iegddp:61 is not listed on IDEAS
    2. Bayer, Patrick & Keohane, Nathaniel & Timmins, Christopher, 2009. "Migration and hedonic valuation: The case of air quality," Journal of Environmental Economics and Management, Elsevier, vol. 58(1), pages 1-14, July.
    3. O’Connor, A. & Zerger, A. & Itami, B., 2005. "Geo-temporal tracking and analysis of tourist movement," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 69(1), pages 135-150.
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    More about this item

    Keywords

    Air pollution; marginal willingness to pay; hedonic price; implicit price;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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