Willingness to Pay for Clean Air: Evidence from Air Purifier Markets in China

Koichiro Ito and Shuang Zhang

No 22367, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a framework to estimate willingness to pay (WTP) for clean air from defensive investment. Applying this framework to product-by-store level scanner data on air purifier sales in China, we provide among the first revealed preference estimates of WTP for clean air in developing countries. A spatial discontinuity in air pollution created by the Huai River heating policy enables us to analyze household responses to long-run exposure to pollution. Our model allows heterogeneity in preference parameters to investigate potential heterogeneity in WTP among households. We show that our estimates provide important policy implications for optimal environmental regulation.

JEL-codes: L0 Q0 Q5 Q51 Q52 Q53 Q56 Q58 (search for similar items in EconPapers)
Date: 2016-06
New Economics Papers: this item is included in nep-agr, nep-dcm, nep-ene, nep-env and nep-tra
Note: DEV EEE IO
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Citations: View citations in EconPapers (46)

Published as Koichiro Ito & Shuang Zhang, 2020. "Willingness to Pay for Clean Air: Evidence from Air Purifier Markets in China," Journal of Political Economy, vol 128(5), pages 1627-1672.

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Working Paper: Willingness to Pay for Clean Air: Evidence from the air purifier markets in China (2016)
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