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Environmental Economics and Policy Studies

, Volume 15, Issue 3, pp 309–328 | Cite as

Residential preferences for stable electricity supply and a reduction in air pollution risk: a benefit transfer study using choice modeling in China

  • Taro OhdokoEmail author
  • Satoru Komatsu
  • Shinji Kaneko
Research Article

Abstract

This paper uses choice modeling surveys from the Chinese cities of Jiujiang, Jiangxi Province, and Changsha, Hunan Province, to identify residential preferences for simultaneously increasing the stability of the electricity supply and decreasing the health risks from air pollution. Air pollution in China is mainly attributable to externalities associated with the electricity supply. We employ a contingent ranking approach as our choice modeling method and test for the transfer of benefits for these preferences between the two sites. The original benefit estimates indicate that the implicit price for reducing the number of power breakdowns is about RMB 83 per times × year × household in Jiujiang and RMB 78 per times × year × household in Changsha, while the implicit price for reducing the duration of power breakdowns is statistically zero in Jiujiang and RMB 71 per times × year × household in Changsha. From the alternative perspective, we estimate that the annualized value of the statistical lifetime risk of cancer caused by air pollution over a 70-year period is RMB 50,844 per year in Jiujiang and RMB 67,146 per year in Changsha. This suggests that we do not reject benefit transferability based on the implicit price of the number of power breakdowns, but do reject it based on the number of deaths from cancer caused by air pollution.

Keywords

Power plants Power breakdowns Air pollution Choice modeling Benefit transfer 

JEL Classification

Q410 Q530 

Notes

Acknowledgments

This paper is part of an ex post evaluation of the 2007 ODA yen loan projects granted by the Japanese Bank for International Cooperation. This research was supported by a Ministry of Education, Culture, Sports, Science, and Technology Grant-in-Aid for Scientific Research (No. 22310030 and 23710057). The authors gratefully acknowledge the comments of Dr. Yohei Mitani as a discussant at the 2008 meeting of the Society for Environmental Economics and Policy Studies, along with those of a number of other participants, including Dr. Kenji Takeuchi of the Graduate School of Economics at Kobe University and Dr. Takahiro Tsuge of the Faculty of Economics at Konan University. The authors also greatly appreciate the comments of two anonymous reviewers and the cooperation of the survey respondents in Jiujiang and Changsha.

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Copyright information

© Springer Japan 2013

Authors and Affiliations

  1. 1.Faculty of Economics, Department of Economics on SustainabilityDokkyo UniversitySokaJapan
  2. 2.Graduate School for International Development and CooperationHiroshima UniversityHiroshimaJapan

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