The Economic Value of Air-Pollution-Related Health Risks in China: A Contingent Valuation Study
Cite this article as: Hammitt, J.K. & Zhou, Y. Environ Resource Econ (2006) 33: 399. doi:10.1007/s10640-005-3606-0 Abstract
The economic value of preventing adverse health effects related to air pollution is estimated using contingent valuation in three diverse locations in China. Values are estimated for three health endpoints: cold, chronic bronchitis, and fatality. Alternative statistical models are tested to study their impact on estimated willingness to pay (WTP) and on the relationship between WTP and respondent characteristics. Using the official exchange rate, the sample-average median WTP to prevent an episode of cold ranges between US$3 and US$6, the WTP to prevent a statistical case of chronic bronchitis ranges between US$500 and US$1,000, and the value per statistical life ranges between US$4,000 and US$17,000. Estimated mean values are between two and thirteen times larger. Our estimates are between about 10 and 1,000 times smaller than estimates for the US and Taiwan using official exchange rates. Indoor air quality, measured for a subset of respondents, shows no consistent relationship with WTP.
Keywords air quality value per statistical life chronic bronchitis willingness to pay contingent valuation risk-risk tradeoff mixture model China References Alberini, A., Kanninen, B., Carson, R. 1997 ‘Modeling Response Incentive Effects in Dichotomous Choice Contingent Valuation’ Land Economics 73 309 324 Google Scholar Alberini, A., Cropper, M., Krupnick, A., Simon, N. 2004 ‘Does the Value of a Statistical Life Vary with Age and Health Status? Evidence from the US and Canada’ Journal of Environmental Economics and Management 48 769 792 CrossRef Google Scholar Alberini, A., Cropper, M., Fu, T.-T., Krupnick, A., Liu, J.-T., Shaw, D., Harrington, W. 1996 ‘What is the Value of Reduced Morbidity in Taiwan?’ Mendelsohn, R. Shaw, D. eds. The Economics of Pollution Control in the Asian Pacific Edward Elgar Publishing Cheltenham, UK 108 149 Google Scholar Beijing Municipality Statistical Bureau 2000Beijing Social and Economics Statistical Yearbook: 2000 China Statistics Press Beijing Google Scholar Bosch, J. L., Hammitt, J. K., Weinstein, M. C., Hunink, M. G. M. 1998 ‘Estimating General-Population Utilities Using one Binary Standard-Gamble Question per Respondent’ Medical Decision Making 18 381 390 Google Scholar Cameron, T. A., Quiggin, J. 1994 ‘Estimation Using Contingent Valuation Data from a “Dichotomous Choice with Follow-up” Questionnaire’ Journal of Environmental Economics and Management 27 218 234 CrossRef Google Scholar Carson, R. T. 2003 ‘Contingent Valuation: A User’s Guide’ Environmental Science and Technology 34 1413 1418 Google Scholar Chestnut, L. G., Ostro, B. D., Vichit-Vadakan, N. 1997 ‘Transferability of Air Pollution Control Health Benefits Estimates from the United States to Developing Countries: Evidence from the Bangkok Study’ American Journal of Agricultural Economics 79 1630 1635 Google Scholar Corso, P. S., Hammitt, J. K., Graham, J. D. 2001 ‘Valuing Mortality-risk Reduction: Using Visual Aids to Improve the Validity of Contingent Valuation’ Journal of Risk and Uncertainty 23 165 184 CrossRef Google Scholar Cropper, M., Krupnick, A., Simon, N. 2004 ‘Does the Value of a Statistical Life Vary with Age and Health Status? Evidence from the US and Canada’ Journal of Environmental Economics and Management 48 769 792 Google Scholar Gold, M. R., Siegel, J. E., Russell, L. B., Weinstein, M. C. 1996Cost-Effectiveness in Health and Medicine Oxford University Press Oxford Google Scholar Haab, T. C., McConnell, K. E. 2002Valuing Environmental and Natural Resources Edward Elgar Publishing, 2002 Cheltenham, UK Google Scholar Hammitt, J. K., Graham, J. D. 1999 ‘Willingness to Pay for Health Protection: Inadequate Sensitivity to Probability?’ Journal of Risk and Uncertainty 18 33 62 CrossRef Google Scholar Hammitt, J. K., Liu, J.-T., Liu, J.-L. 2001 ‘Valuing a Taiwanese Wetland Using Contingent Valuation: Sensitivity to Question Format and Scope’ Environment and Development Economics 6 259 268 CrossRef Google Scholar Hanemann, W. M., Loomis, J., Kanninen, B. 1991 ‘Statistical Efficiency of Double-Bounded Dichotomous Choice Contingent Valuation’ American Journal of Agricultural Economics 73 1255 1263 Google Scholar Jones-Lee, M. W. 1974 ‘The Value of Changes in the Probability of Death or Injury’ Journal of Political Economy 82 835 849 Google Scholar Krupnick, A., Cropper, M. L. 1992 ‘The Effect of Information on Health Risk Valuations’ Journal of Risk and Uncertainty 5 29 48 CrossRef Google Scholar Krupnick, A., Alberini, A., Cropper, M., Simon, N., O’Brien, B., Goeree, R., Heintzelman, M. 2002 ‘Age, Health and the Willingness to Pay for Morality Risk Reductions: A Contingent Valuation Study of Ontario Residents’ Journal of Risk and Uncertainty 24 161 186 CrossRef Google Scholar Liu, J.-T., Hammitt, J. K. 1999 ‘Perceived Risk and Value of Workplace Safety in a Developing Country’ Journal of Risk Research 2 263 275 Google Scholar Liu, J.-T., Hammitt, J. K., Liu, J.-L. 1997 ‘Estimated Hedonic Wage Function and Value of Life in a Developing Country’ Economics Letters 57 353 358 CrossRef Google Scholar Liu, J.-T., Hammitt, J. K., Wang, J.-D., Liu, J.-L. 2000 ‘Mother’s Willingness to Pay for Her Own and Her Child’s Health: A Contingent Valuation Study in Taiwan’ Health Economics 9 319 326 CrossRef Google Scholar Turnbull, B. W. 1974 ‘Nonparametric Estimation of a Survivorship Function with Doubly Censored Data’ Journal of the American Statistical Association 69 169 173 Google Scholar Viscusi, W. K., Aldy, J. E. 2003 ‘The Value of a Statistical Life: A Critical Review of Market Estimates Throughout the World’ Journal of Risk and Uncertainty 27 5 76 Google Scholar Viscusi, W. K., Magat, W. A., Huber, J. 1991 ‘Pricing Environmental Health Risks: Survey Assessment of Risk-Risk and Risk-Dollar Trade-Offs for Chronic Bronchitis’ Journal of Environmental Economics and Management 21 32 51 Google Scholar Weinstein, M. C., Shepard, D. S., Pliskin, J. S. 1980 ‘The Economic Value of Changing Mortality Probabilities: A Decision-Theoretic Approach’ Quarterly Journal of Economics 94 373 396 Google Scholar Werner, M. 1999 ‘Allowing for Zeros in Dichotomous-Choice Contingent-Valuation Models’ Journal of Business and Economic Statistics 17 479 486 Google Scholar