Estimating the Demand for Air Quality in Four U.S. Cities

Jeffrey Zabel · Katherine A. Kiel

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Economic and Environmental Valuation Housing Market and Economics Environmental and Air Quality Management

Abstract

An analysis of the demand for air quality in four MSAs in the United States is presented using the American Housing Survey data from 1974-1991, the Decennial U.S. Censuses, and the EPA Aerometric Information Retrieval System. The marginal prices of air quality are obtained from parameter estimates for the pollution variables in a hedonic house price model, and the marginal willingness to pay (inverse demand) equations for air quality are estimated using these prices. In two of the four (inverse) demand for air quality equations, the own-good coefficient is negative and significant, while the income coefficient is positive and significant.

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References

1974Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition 1987Hedonic Prices and Implicit Markets: Estimating Demand and Supply Functions for Differentiated Products 2010The Measurement of Environmental and Resource Values

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