Air Quality Degradation: Can Economics Help in Measuring its Welfare Effects? A Review of Economic Valuation Studies

Kougea, Eva; Koundouri, Phoebe

doi:10.5772/16794

Cited by 3 publications

(7 citation statements)

References 44 publications

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“…The 'polluting factory' is a classic example of a negative externality whereby the social costs of air pollution are not covered by the polluter, nor reflected in market prices, but these costs (including health impacts) are imposed on everybody. This results in a sub-optimal price, and thereby excessive production (or consumption) of the good that generates the externality (Kougea & Koundouri, 2011). Whilst the polluting factory presents a neat example for students new to the discipline of economics, its use as an example of an (negative) externality is fundamentally true of all environmental goods and services.…”

Section: The Economics Of the Environment And Human Healthmentioning

confidence: 99%

“…Given the role of the housing market in allocating where people live, one example could be the subsidization of better quality housing in healthy areas for poorer households. However, in order to incorporate the price of the environment within a public health framework, the monetary benefits (or conversely damages) to the public health of a good (poor) environment must be calculated (Kougea and Koundouri, 2011).…”

Section: Individual Health As a Public Good And The Rationale For Gov...mentioning

confidence: 99%

“…Whilst the current monetary benefit of a healthy environment to individual health outcomes is unknown, methods such as the Willingness To Pay (WTP), are available to provide monetary estimates for non-market goods and services. Please see Kougea and Koundouri, (2011) for a review of methods that may be used to provide monetary estimates for the economic cost of air pollution (an environmental bad) on human health. Briefly, non-market valuation approaches allow economists to calculate the monetary value of healthy environment with regard to individual health outcomes.…”

Section: Individual Health As a Public Good And The Rationale For Gov...mentioning

confidence: 99%

“…Internationally the use of monetary valuation techniques in environmental appraisal has increased significantly (Kougea & Koundouri, 2011). Techniques such as the contingent valuation and choice experiments which can estimate values for both users and non-users are being intensively used, and are being constantly refined and extended (Dickie & List, 2006;Kougea & Koundouri, 2011).…”

Section: Individual Health As a Public Good And The Rationale For Gov...mentioning

confidence: 99%

“…Within the public health sphere, Kougea & Koundouri, (2011) provide a review of the economic literature, which has attempted to elicit monetary values associated with air pollution and human health. However, based on their review, Kougea & Koundouri, (2011) recommend that for the true cost of the environment to human health to be adequately valued, improved scientific information is needed in order to be able to produce more reliable dose-response functions, and thus more credible economic estimates of the values.…”

Section: Individual Health As a Public Good And The Rationale For Gov...mentioning

confidence: 99%

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Market Failures, the Environment, and Human Health

Morrissey¹

2018

Oxford Research Encyclopedia of Environmental Science

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Knowledge of the important role that the environment plays in determining human health predates the modern public health era. However, the tendency to see health, disease, and their determinants as attributes of individuals rather than characteristics of communities meant that the role of the environment in human health was seldom accorded sufficient importance during much of the 20th century. Instead, research began to focus on specific risk factors that correlated with diseases of greatest concern, i.e., the non-communicable diseases such as cardiovascular disease, asthma, and diabetes. Many of these risk factors (e.g., smoking, alcohol consumption, and diet) were aspects of individual lifestyle and behaviors, freely chosen by the individual. Within this individual-centric framework of human health, the standard economic model for human health became primarily the Grossman model of health and health care demand. In this model, an individual’s health stock may be increased by investing in health (by consuming health services, for example) or decreased by endogenous (age) or exogenous (smoking) individual factors. Within this model, individuals used their available resources, their budget, to purchase goods and services that either increased or decreased their health stock. Grossman’s model provides a consumption-based approach to human health, where individuals purchase goods and services required to improve their individual health in the marketplace. Grossman’s model of health assumes that the goods and services required to optimize good health can be purchased through market-based interactions and that these goods and services are optimally priced—that the value of the goods and services are reflected in their price. In reality, many types of goods and services that are good for human health are not available to purchase, or if they are available they are undervalued in the free market. Across the environmental and health literature, these goods and services are, today, broadly referred to as “ecosystem services for human health.” However, the quasi-public good nature of ecosystem services for human health means that the private market will generate a suboptimal environment for both individual and public health outcomes. In the face of continued austerity and scarce public resources, understanding the role of the environment in human health may help to alleviate future health care demand by decreasing (or increasing) environmental risk (or benefits) associated with health outcomes. However, to take advantage of the role that the environment plays in human health requires a fundamental reorientation of public health policy and spending to include environmental considerations.

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Section: The Economics Of the Environment And Human Healthmentioning

confidence: 99%

Section: Individual Health As a Public Good And The Rationale For Gov...mentioning

confidence: 99%

Section: Individual Health As a Public Good And The Rationale For Gov...mentioning

confidence: 99%

Section: Individual Health As a Public Good And The Rationale For Gov...mentioning

confidence: 99%

Section: Individual Health As a Public Good And The Rationale For Gov...mentioning

confidence: 99%

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Market Failures, the Environment, and Human Health

Morrissey¹

2018

Oxford Research Encyclopedia of Environmental Science

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Estimating economic benefits associated with air quality improvements in Hanoi City: An application of a choice experiment

Nguyen

et al. 2021

Economic Analysis and Policy

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Quantifying Welfare Impacts of Air Pollution in Seoul: A Two-Stage Hedonic Price Approach

Jun

2018

J. Env. Assmt. Pol. Mgmt.

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This study aims to measure welfare loss due to the high pollution levels of PM10 and NO2 in the Seoul metropolitan area (SMA), Korea, which do not comply with the international standards, using spatial hedonic price models with apartment sales and air pollution data in 2010. The major findings were as follow: First, spatial hedonic model estimation reveals statistically significant negative signs for air pollution index for all submarkets, empirically presenting a trade-off between air pollution level and housing values. Second, the own-good quantity variable (air pollution index) has a statistically significant negative coefficient, indicating a diminishing marginal willingness to pay (MWTP) for additional level of the air pollution. Third, a worsening air quality brings about a substantial amount of welfare loss ($26.3 billion) among households residing in the SMA.

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Air Quality Degradation: Can Economics Help in Measuring its Welfare Effects? A Review of Economic Valuation Studies

Cited by 3 publications

References 44 publications

Market Failures, the Environment, and Human Health

Market Failures, the Environment, and Human Health

Estimating economic benefits associated with air quality improvements in Hanoi City: An application of a choice experiment

Quantifying Welfare Impacts of Air Pollution in Seoul: A Two-Stage Hedonic Price Approach

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