An Evaluation of Economic Values of Air Quality in Taipei City– An Application of Hedonic Price Method

• Main Authors: Shen Heng-Li, 沈恆立
• Other Authors: 陳宛君
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/76901104146892800315

碩士 === 中國文化大學 === 經濟學研究所 === 94 === Abstract The air pollution problem in Taipei has been serious and the air pollution has influenced citizens' quality of life and health. This research was set about estimating and comparing economic values of air quality in Taipei in 1994 and 2004. Air quality is non-market goods, we can't find a real trade market of air quality for reflecting its economic benefits at the price of trade. This study used the hedonic price method, looking for a substitute market to find values of air quality. After estimating characteristic function, this study utilized the method to estimate indirectly its economic benefits. Among air pollutants, the particulate matters and suspending particles can be perceived by eyes. People are most directly and fast in response to these pollutions. This study used particulate matters and suspending particles as air pollution variables. The data of these two variables was generated by GIS arcview software. The findings of this study are as what follow. (1) In Taipei, the air quality as indicated by particulate matters and suspending particles was cleaner in 2004 than in 1994. Air quality is getting apparent improvement in 2004. Density of air pollution in Taipei is lower than the pollution standard, which was announced by the government. (2) By R2 or adjusted R2 to compare regressions’ explain ability and by the directions and magnitudes of coefficients. This study found that a semi-log model in 1994 and a double-log model in 2004 are the best models. (3) Suspending particles have two-years time lag for effective influence on price of houses. (4) In Taipei, suspend particles had significant negative influences on prices of houses in 1994. The particulate matters had insignificant negative influences on prices of houses in 1994. (5) In Taipei, the particulate matters and suspend particles had insignificant negative influence on prices of houses in 2004. (6) If density of suspends particles reduces one unit (μg/m3), people were willing to pay 27,132 NT dollars in 1994. (7) In 2004, to reduce one unit (μg/m3) of the density of particulate matters and suspend particles, people were willing to pay 90,765 and 26,334 NT dollars respectively. After converting to price of 1994, the willingness to pay becomes 77,958 and 22,617 NT dollars respectively. (8) Though air quality has been obviously improved in 2004, people demand much more improvement. This is evidenced from the estimation results of the hedonic function of particulate matters. Its impacts on house prices were not statistically significant in 1994. Through ten years, the negative impacts turned to be extremely significant in 2004. It is obvious that people's requisition for higher air quality is stricter and stricter. (9) Even though, over the past ten years, the pollution of suspend particles had already been obviously improved, people’s willingness to pay for higher air quality is much higher (27,132 NT dollars in 1994, 26,334 NT dollars in 2004). It is obvious that people's requisition for higher air quality is stricter and stricter. (10) Suppose that no air quality improvement had been made from 1994 to 2004 and suppose that, in 2004, air quality was improved all at once, from1994 level to its 2004 level. People were willing to pay 8,682,154 NT dollars per household for the particulate matters and 3,560,706 NT dollars per household for suspend particles. (11) Following (10), total economic values of air quality improvement for the past ten years (1994 - 2004) can be get by multiplying household willingness to pay by total household number in Taipei in 2004. The total willingness to pay was 8,016.4 billion and 3,287.7 billion NT dollars for particulate matters and suspend particles.