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Who counts in evaluating the effects of air pollution policies on households? Non-market valuation in the presence of dependencies

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  • Evans, Mary F.
  • Poulos, Christine
  • Kerry Smith, V.

Abstract

Individuals who are likely to realize the largest benefits from improvements in air quality often depend on other members of their households to make time or monetary contributions to their care. The presence of these dependency relationships among household members poses challenges for benefit estimation since it is unlikely that the conditions necessary for recovering the underlying individual preferences from household choices are satisfied in this setting. We propose a conceptual framework that highlights the role of these dependencies in the choice models used to estimate the willingness to pay for environmental quality improvements. We design a complementary stated preference survey that describes hypothetical dependency relationships for household members of different ages to test the implications of our conceptual model. Respondents' stated choices take into account the proposed care-giving responsibilities for young children and teenagers but not for older adults.

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  • Evans, Mary F. & Poulos, Christine & Kerry Smith, V., 2011. "Who counts in evaluating the effects of air pollution policies on households? Non-market valuation in the presence of dependencies," Journal of Environmental Economics and Management, Elsevier, vol. 62(1), pages 65-79, July.
    • Handle: RePEc:eee:jeeman:v:62:y:2011:i:1:p:65-79
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    1. Wiktor Adamowicz & Mark Dickie & Shelby Gerking & Marcella Veronesi & David Zinner, 2014. "Household Decision Making and Valuation of Environmental Health Risks to Parents and Their Children," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(4), pages 481-519.
    2. Cameron, Trudy Ann & DeShazo, J.R. & Johnson, Erica H., 2010. "The effect of children on adult demands for health-risk reductions," Journal of Health Economics, Elsevier, vol. 29(3), pages 364-376, May.
    3. Alberini, Anna & Ščasný, Milan, 2013. "Exploring heterogeneity in the value of a statistical life: Cause of death v. risk perceptions," Ecological Economics, Elsevier, vol. 94(C), pages 143-155.
    4. Martina Menon & Federico Perali & Marcella Veronesi, 2014. "Recovering Individual Preferences for Non-Market Goods: A Collective Travel-Cost Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(2), pages 438-457.
    5. Egan, Kevin J. & Corrigan, Jay R. & Dwyer, Daryl F., 2015. "Three reasons to use annual payments in contingent valuation surveys: Convergent validity, discount rates, and mental accounting," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 123-136.
    6. Bangzhu Zhu & Runzhi Pang & Julien Chevallier & Yi-Ming Wei & Dinh-Tri Vo, 2019. "Including intangible costs into the cost-of-illness approach: a method refinement illustrated based on the PM2.5 economic burden in China," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(4), pages 501-511, June.

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    More about this item

    Keywords

    Household decision making Stated preference Air pollution Dependency;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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