Current Air Pollution and Willingness to Pay for Better Air Quality: Revisiting the Temporal Reliability of the Contingent Valuation Method

Jie He and Bing Zhang

Environmental & Resource Economics, 2021, vol. 79, issue 1, No 7, 135-168

Abstract: Abstract In this study we examine whether and why preferences for environmental quality improvements depend on current quality. We conducted contingent valuation surveys over the course of a year in Nanjing, China, and find that the willingness to pay for future air quality improvements increases by 0.693% for every 1% increase in the current PM2.5 level. Therefore, the issue of "when" a valuation study is conducted has important implications for the estimation of benefits, and further deserves consideration when applying benefit transfer methods. One possible explanation for this result is projection bias, which arises when people exaggerate the extent to which future preferences will align with current tastes.

Keywords: Temporal reliability; Contingent valuation; Decision-making; Current air quality; Rational and psychological mechanisms (search for similar items in EconPapers)
JEL-codes: D91 Q51 Q53 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s10640-021-00556-y

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