Willingness to pay for clean air: Evidence from diesel vehicle registration restrictions in Japan

Shuhei Nishitateno and Paul Burke

CCEP Working Papers from Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University

Abstract: This paper documents the effect of diesel vehicle registration restrictions introduced in Japan in 2001 in reducing suspended particulate matter (SPM) concentrations. The focus is on Aichi and Mie prefectures, home to a number of municipalities that were required to implement these restrictions in 2001. The paper then uses this intervention to estimate the causal effect of air pollution on land values. We obtain estimates of the elasticity of residential land prices with respect to SPM concentration of between –0.4 and –1.0. The revealed willingness to pay for the improvements in air quality induced by the intervention in Aichi and Mie is estimated at about US$7 billion. We also find evidence that net in-migration appears to be a key mechanism via which clean air was capitalized into higher land values. The results are robust to a number of estimation approaches and sample restrictions.

Date: 2021-01
New Economics Papers: this item is included in nep-agr, nep-cwa, nep-dcm, nep-ene, nep-env and nep-tre
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Citations: View citations in EconPapers (3)

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https://ccep.crawford.anu.edu.au/sites/default/fil ... ishitateno_burke.pdf

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Journal Article: Willingness to pay for clean air: Evidence from diesel vehicle registration restrictions in Japan (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:een:ccepwp:2101

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