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Estimating Demand For Good Climate And Air Quality In Taiwan

Author

Listed:
  • DAIGEE SHAW

    (Academia Sinica, Nangang Dist., Taipei City, Taiwan)

  • JU-CHIN HUANG

    (University of New Hampshire, Durham, New Hampshire, USA)

  • CHUAN-YAO LIN

    (Academia Sinica, Nangang Dist., Taipei City, Taiwan)

  • TING-YU HSU

    (National Chengchi University, Zhinan Road, Wenshan Dist., Taipei City, Taiwan)

  • MINGCHE TSAI

    (National Taipei University, Daxue Road, Sanxia Dist., New Taipei City, Taiwan)

Abstract

We measure the amenity values of climate and air quality in Taiwan using the two-step hedonic price method (HPM). Separate hedonic housing price equations, one for each of three metropolitan areas that represent respective housing markets in Northern, Central, and Southern Taiwan, are estimated. We find evidence of a significant impact of climate and air quality on housing prices. As expected, residents in Taiwan prefer a warmer winter, cooler summer, lower humidity, and better air quality. Based on the results of the housing price regression, we compute implicit prices for environmental amenities, and then pool observations from all three metropolitan areas to estimate the demand for environmental amenities. The estimated demand functions for environmental amenities are used to evaluate the benefits and losses from changes in climate and air quality in Taiwan. Our results show that, compared to the benefits of a higher temperature in January, the losses from the rise in temperature in July are much higher in such a way that global warming is resulting in significant net losses in Taiwan. The area-specific welfare analysis in this study will help in informing climate change policy formulation and decision-making in Taiwan.

Suggested Citation

  • Daigee Shaw & Ju-Chin Huang & Chuan-Yao Lin & Ting-Yu Hsu & Mingche Tsai, 2021. "Estimating Demand For Good Climate And Air Quality In Taiwan," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 12(01), pages 1-24, February.
    • Handle: RePEc:wsi:ccexxx:v:12:y:2021:i:01:n:s2010007821500032
    DOI: 10.1142/S2010007821500032
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    Cited by:

    1. Zhang, Nan & Mendelsohn, Robert & Shaw, Daigee, 2023. "How to Identify and Estimate the Demand for Job Safety?," MPRA Paper 118594, University Library of Munich, Germany.

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