Willingness to Pay for Clean Air: Evidence from Air Purifier Markets in China

By Koichiro Ito, Shuang Zhang. Journal of Political Economy, 2020

430 citations recorded by the source corpus.

We develop a framework to estimate willingness to pay for clean air from defensive investments on differentiated products. Applying this framework to scanner data on air purifier sales in China, we find that a household is willing to pay $1.34 annually to remove 1 μg/m3 of air pollution (PM10) and $32.7 annually to eliminate the pollution induced by the Huai River heating policy. Substantial heterogeneity is explained by income and exposure to information on air pollution. Using these estimates, we evaluate various environmental policies and quantify the value of recent air quality improvements since China declared a war on pollution in 2014.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/30758a870c806e168d34ecab63bd217fb4ff0aa4

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. James Berry
2. G. Fischer
3. Jennifer Li
4. Jian Zhang
5. Massimo Massa
6. Raymond Guiteras
7. H. Zhang

Citations in the corpus

• Eliciting and Utilizing Willingness to Pay: Evidence from Field Trials in Northern Ghana (2020, positive): “Ito and Zhang (2016) provide an alternative approach using observational data, carefully isolating the price premium for goods with varying environmental benefits.”
• Air pollution, behavioral bias, and the disposition effect in China (2019, background): “Additionally, people are willing to pay for clean air and health insurance (Chay and Greenstone, 2005; Ito and Zhang, 2016; Chang, Huang, and Wang, 2016).”
• Can Technology Solve the Principal-Agent Problem? Evidence from China’s War on Air Pollution (2020, neutral): “Further, the Beijing Olympic Games in 2008 and celebrity posts of air quality information and measurement on Weibo (Chinese Twitter) raised public concerns over air pollution and information in China (He et al., 2016; Ito and Zhang, 2020).”