Experts have calculated the cost of pollution in China for years, weighing the drag on productivity from medical costs, factory closures and traffic restrictions. Now economists say they know exactly how much consumers are willing to pay to clean their own air.
Chinese consumers are willing to pay USD5.46 on average to remove each microgram of pollutant per cubic meter of air, according a new paper by environmental economists Koichiro Ito from the University of Chicago and Shuang Zhang of the University of Colorado at Boulder. That works out to spending about $213 over five years, according to their study tracking air purifier buying habits in 81 Chinese cities over seven years.
Pollution in Beijing and other large cities regularly triggers health warnings and occasionally soars to “hazardous” levels when particles smaller than 2.5 micrometers in diameter – PM2.5 – reach concentrations above 250 micrograms per cubic meter. The study reflects rising concern about breathing clean air as shown by more purchases of air purifiers, many of them imported, by wealthy and increasingly middle-class consumers.
“Having a barometer for people’s willingness to pay for clean air can help leaders determine which policies are most effective in improving welfare,” Ito, an assistant professor at the Harris School of Public Policy, said in a research summary. “It sheds light on the degree to which citizens prioritize economic growth over environmental regulations — a subject of constant debate and importance in emerging economies.”
Average top-of-the-line models can cost hundreds of dollars each, and wealthier Chinese in more polluted areas are more willing to pay more for clean air, the researchers said.
Pinning down how much consumers are willing to pay to breathe clean air has important policy implications for emerging economies, where striking a balance between economic development and environmental protection has proved a crucial task, Ito and Zhang write in their working paper published by the National Bureau of Economic Research. Bloomberg
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