The Value of Clean Air in China: Evidence from Beijing and Shanghai

Abstract

We estimate the willingness to pay (WTP) of Beijing and Shanghai residents for improving the air quality of the two cities from their levels prior to the 2008 Beijing Olympic Games to the level achieved during the Olympics. The data are obtained from a contingent valuation study conducted through face-to-face interviews in June 2008 in Beijing and Shanghai prior to the Beijing Olympics, during which time there was intensive debate about Beijing’s air quality. Residents in both cities are willing to pay more when they are more exposed to air pollution, when their disposable income increases, and when they have stronger beliefs that public opinion plays an important role in government policy making. Beijing residents are willing to pay more than Shanghai residents, due possibly to Beijing’s poorer air quality. Overall, aggregate WTP for air quality improvement accounts for about 0.53% of the 2008 GDP in Beijing and 0.22% of the 2008 GDP in Shanghai.

Keywords

contingent valuation / Beijing Olympic Games / air quality

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2014 Higher Education Press and Brill