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Willingness to Pay for Clean Air: Evidence from the UK
Author:
Giorgio Maarraoui
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,
Walid Marrouch
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,
Faten Saliba
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Ada Wossink
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Series:
IMF Working Papers
Volume/Issue:
Volume 2023: Issue 035
Language:
English
Publication Date:
17 Feb 2023
DOI:
https://doi.org/10.5089/9798400234668.001
ISBN:
9798400234668
ISSN:
1018-5941
Pages:
50
Keywords:
Air Pollution; Happiness; Policy Valuation; Climate Change; Environmental Policies; Pollution Taxes; Pollution Abatement Subsidies; life satisfaction data; dataset description; air pollutant; pollutants' correlation; household data; ordinal Logit; Income; Europe; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper uses life satisfaction data to help the design of climate mitigation policies in the United Kingdom. We assess the effects of the exposure to ambient pollutants on long-term life satisfaction and short-term mental health in the UK. We estimate augmented Cobb-Douglas utility functions using pooled and random effects ordinal logit models. Results show that increases in NO2, PM10 and PM2.5 significantly decrease the odds of longterm happiness and short-term mental health in the UK. The willingness to pay for clean air is also significant and increases with level of education. These measurements derived can be used as benchmarks for pollution abatement subsidies or pollution taxes and can help in projecting a more comprehensive assessment of costs and benefits.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund