The Value of Improved Air Quality: A Contingent Valuation Study on Wonji Town (Ethiopia)

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The purpose of this study is twofold: (i) To estimate the benefits of reduction in air pollution in wonji town. (ii) To identify the variables which determine willingness to pay for air pollution reduction. The contingent valuation method was used for investigation. The survey is based on a sample of three hundred thirty two households. The study reveals that most people are aware of emission problems and willing to pay to reduce it. Censored data (300) was used to analyses the determinants of WTP, and to estimate benefits. Both Tobit and ordered probit models were applied to capture the effects of some variables such as distance from the polluter factory , wealth, income, education, pollution related diseases, etc. The signs of coefficients, except pollution related diseases, are as expected. Wealth, education , distance from polluter, interest in environmental problems and concern for future generations have significant impact on WTP. The estimated benefit, using frequency distribution, is nearly 29,000 birr per month. On the other hand , the benefit, using the mean WTP, is nearly 31,000 birr. These benefits may help to finance measures which could reduce the pollution level such as improved quality fuels, operational and maintenance improvement, and pollution control equipment improvement/installation.



Contingent Valuation Study, Wonji Town Ethiopia