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Valuing Air Quality Using Happiness Data: The Case of China

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  • Zhang, Xin
  • Zhang, Xiaobo
  • Chen, Xi

Abstract

This paper estimates the monetary value of cutting PM2.5, a dominant source of air pollution in China. By matching hedonic happiness in a nationally representative survey with daily air quality data according to the dates and counties of interviews in China, we are able to estimate the relationship between local concentration of particulate matter and individual happiness. By holding happiness constant, we calculate the tradeoff between the reduction in particulate matter and income, essentially a happiness-based measure of willingness-to-pay for mitigating air pollution. We find that people on average are willing to pay ¥258 ($42, or 1.8% of annual household per capita income) per year per person for a 1% reduction in PM2.5.

Suggested Citation

  • Zhang, Xin & Zhang, Xiaobo & Chen, Xi, 2017. "Valuing Air Quality Using Happiness Data: The Case of China," Ecological Economics, Elsevier, vol. 137(C), pages 29-36.
    • Handle: RePEc:eee:ecolec:v:137:y:2017:i:c:p:29-36
    DOI: 10.1016/j.ecolecon.2017.02.020
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    More about this item

    Keywords

    Willingness to pay; Hedonic happiness; Air pollution; China;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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