Valuing air quality impacts using stated choice analysis: Trading off visibility against morbidity effects

Abstract

Direct valuation of air quality has as a drawback; that estimated willingness to pay figures cannot be apportioned to the several environmental goods affected by air quality, such as mortality and morbidity effects, visibility, outdoor recreation, among others. To address this issue, we implemented a survey in Santiago de Chile to identify component values of confounded environmental services by means of a choice experiment. We designed a survey where two environmental goods, a morbidity health endpoint and improved visibility, had to be jointly traded off against each other and against money in a unified framework.

The health endpoint is a respiratory illness that results in an emergency room visit with a probability of hospitalization being required for appropriate treatment. Visibility is described as an aesthetic effect related to the number of days per year of high visibility.

Modeling comprises both a logit model with covariates and a mixed-logit model. The results suggest that the health endpoint midpoint value is in a range from USD 2,800 to USD 13,000, mainly depending on the model and age stratum. The mid point value of an extra day of high visibility per year ranges from USD 281,000 to USD 379,000.