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2017-02-27 | project

Air quality and household welfare in Asian mega-cities

The goal of this project is to generate evidence on households' willingness to pay (WTP) for improved air quality in urban Asia. This evidence is both critically important and timely because numerous cities in Asia now have alarming levels of air pollution. Comparable estimates of household WTP for clean air from across the region can improve cost-benefit analysis of numerous national, regional and international efforts to improve urban air quality in low and middle income countries.

In many low and middle income countries (especially in Asia), urban air quality has never been worse, with harmful impacts on human health and wellbeing. Even more alarming, levels of many toxic air pollutants are projected to increase over the coming decades. While many Asian countries are beginning to implement pollution control policies, these regulations have so far been tentative. The lack of clear and effective polices is perhaps understandable due to the high cost of air pollution policies. Another cause may be that the benefits are underestimated because urban households are uninformed of the negative effects of air pollution, or simply do not value cleaner air.

Because evidence of urban households’ perceived benefits from cleaner air in developing countries is sorely lacking, we intend to:

  1. develop and pilot an internet-based survey instrument,
  2. collect rich, household-level data in three Asian mega-cities that face very high air pollution – Delhi, Jakarta and Beijing,
  3. develop conventional and novel estimates of household WTP for clean air, and
  4. build a cross-country team of experts.

First, we will collect data on various (averting) behaviors and preferences for clean air among urban residents of these mega-cities. Second, we will calculate and examine how WTP varies (i) between and within cities and sub-populations, defined by socio-demographic, technological, and environmental characteristics, (ii) by information treatments, i.e. providing information regarding air pollution levels and/or compensatory public goods, and (iii) by various wellbeing measures. By building an international research team and a strong set of survey tools, we can repeat similar assessments in other developing countries, and ultimately develop benefits functions to support air quality policy design and analysis and aid policy makers’ decision making.