Willingness to Pay for Clean Air: Evidence from the air purifier markets in China

Koichiro Ito and Shuang Zhang

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: We develop a framework to estimate the willingness to pay (WTP) for clean air from defensive investments. 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 regulations.

Pages: 55 pages
Date: 2016-06
New Economics Papers: this item is included in nep-agr, nep-cna, nep-dcm, nep-ene, nep-env, nep-sog and nep-tra
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Citations: View citations in EconPapers (21)

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https://www.rieti.go.jp/jp/publications/dp/16e074.pdf (application/pdf)

Related works:
Journal Article: Willingness to Pay for Clean Air: Evidence from Air Purifier Markets in China (2020)
Working Paper: Willingness to Pay for Clean Air: Evidence from Air Purifier Markets in China (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:16074

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