Willingness to pay for clean air: Evidence from quasi-experiment in Japan

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No 285086, 2019 Conference (63rd), February 12-15, 2019, Melbourne, Australia from Australian Agricultural and Resource Economics Society (AARES)

Abstract: Over the past decades ambient concentrations of suspended particulate matter (SPM) have dramatically reduced in metropolitan areas in Japan. This paper analyzes a property-level panel dataset for 1992-2015 to measure the extent to which the improved air quality was capitalized into residential land prices. Single-equation estimates show no evidence of the capitalization. To address potential endogeneity biases, I instrument SPM concentrations with municipalities’ designation status under the Automobile NOx/PM Law (ANPL), and find that the elasticity of residential land prices with respect to SPM concentration is -0.57. Using IV approach, I also find that the improvements in SPM concentrations increased inflows of migrations. These results are confirmed with a battery of robustness checks.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 43
Date: 2019-02
New Economics Papers: this item is included in nep-agr, nep-dcm, nep-ene and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare19:285086

DOI: 10.22004/ag.econ.285086

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