IMPLICIT PRICES OF JOB RISK, CLIMATE, AND AIR POLLUTION: EVIDENCE FROM TAIWAN

Nan Zhang, Daigee Shaw () and Chuan-Yao Lin ()
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Nan Zhang: Jinhe Center for Economic Research, Xi’an Jiaotong University, 28, Xianning West Road, Beilin District, Xi’an City, P. R. China
Daigee Shaw: ��Institute of Economics, Academia Sinica, 128, Section 2, Academia Road, Nangang, Taipei, Taiwan
Chuan-Yao Lin: ��Research Center for Environmental Changes, Academia Sinica, 128, Section 2, Academia Road, Nangang, Taipei, Taiwan

Climate Change Economics (CCE), 2022, vol. 13, issue 04, 1-19

Abstract: We examine the implicit price of job mortality rates, climate, and air pollution in Taiwan under the hedonic wage frame with panel data from 1999 to 2014. We adopt a fixed-effects model to control for the omitted year-specific factors and time-invariant individual, industry, and city factors that may affect the wage. The within-individual variations in climate and air pollution from workers who have changed their job locations make it possible to identify the impacts of climate and air pollution on wages. We find that workers in Taiwan are willing to pay 308 USD (in 2014 value terms) for the January temperature to increase by 1∘C,781 USD for the July temperature to decline by 1∘C, indicating a net loss from global warming. Besides, the implicit price of air quality is 45 USD for PM 10 concentrations to fall by 1 unit (μg∕m3), and the implicit price of job risks is 140 USD per unit (1/100,000).

Keywords: Implicit price; hedonic wage model; fixed-effects model; VSL; risk premium; climate premium; pollution premium (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:wsi:ccexxx:v:13:y:2022:i:04:n:s2010007822500075

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DOI: 10.1142/S2010007822500075

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