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Willingness to pay for reduction in air pollution: a multilevel analysis

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Listed:
  • Fredrik Carlsson

    (Göteborg University)

  • Peter Martinsson

    (Göteborg University
    Lund University)

Abstract

This paper presents the multilevel model approach to analyzing contingent valuation surveys of individuals’ willingness to pay for reductions in the level of air pollution. It is likely that individuals living in the same area are exposed to the same level of air pollution, and accordingly these individuals’ valuations of a reduction may be correlated. Thus, the data have a hierarchical structure with individuals clustered within regions, and this structure violates the general assumption of independence among observations. Multilevel models allow for this type of data structure. In this paper we analyze individuals’ stated willingness to pay in an open-ended contingent valuation survey for a reduction in the local level of air pollution in Sweden. The results suggest that most variations are among individuals. However, our results indicate that there are also variations at higher levels, which may be explained by homogeneous preferences for a reduction in air pollution among individuals living in the same household or region with a similar level of air pollution.

Suggested Citation

  • Fredrik Carlsson & Peter Martinsson, 2001. "Willingness to pay for reduction in air pollution: a multilevel analysis," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 4(1), pages 17-27, March.
    • Handle: RePEc:spr:envpol:v:4:y:2001:i:1:d:10.1007_bf03353969
    DOI: 10.1007/BF03353969
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    References listed on IDEAS

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    1. Bente Halvorsen & Kjartan Sœlensminde, 1998. "Differences between Willingness-to-Pay Estimates from Open-Ended and Discrete-Choice Contingent Valuation Methods: The Effects of Heteroscedasticity," Land Economics, University of Wisconsin Press, vol. 74(2), pages 262-282.
    2. Peter A. Diamond & Jerry A. Hausman, 1994. "Contingent Valuation: Is Some Number Better than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 45-64, Fall.
    3. Ian H. Langford & Ian J. Bateman & Andrew P. Jones & Hugh D. Langford & Stavros Georgiou, 1998. "Improved Estimation of Willingness to Pay in Dichotomous Choice Contingent Valuation Studies," Land Economics, University of Wisconsin Press, vol. 74(1), pages 65-75.
    4. Alberini, Anna & Cropper, Maureen & Fu, Tsu-Tan & Krupnick, Alan & Liu, Jin-Tan & Shaw, Daigee & Harrington, Winston, 1997. "Valuing Health Effects of Air Pollution in Developing Countries: The Case of Taiwan," Journal of Environmental Economics and Management, Elsevier, vol. 34(2), pages 107-126, October.
    5. Bente Halvorsen, 1996. "Ordering effects in contingent valuation surveys," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 8(4), pages 485-499, December.
    6. Bengt Kriström, 1993. "Comparing continuous and discrete contingent valuation questions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 3(1), pages 63-71, February.
    7. Nigel Rice & Andrew Jones, 1997. "Multilevel models and health economics," Health Economics, John Wiley & Sons, Ltd., vol. 6(6), pages 561-575, November.
    8. Duncan, Craig & Jones, Kelvyn & Moon, Graham, 1996. "Health-related behaviour in context: A multilevel modelling approach," Social Science & Medicine, Elsevier, vol. 42(6), pages 817-830, March.
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    Cited by:

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    3. Moritz A. Drupp & Zachary M. Turk & Ben Groom & Jonas Heckenhahn, 2024. "Limited Substitutability, Relative Price Changes and the Uplifting of Public Natural Capital Values," CESifo Working Paper Series 11156, CESifo.

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