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TERI Information Digest on Energy and Environment
Year : 2002, Volume : 1, Issue : 1
First page : ( 123) Last page : ( 124)
Print ISSN : 0972-6721.

Environmental economics


[174]Valuing the benefits of air pollution abatement using a health production function
Kumar S and Rao DN. 2001The Indian economy is highly prone to industrial pollution and is making compliance decisions in order to meet environmental standards. Environmental regulations impose significant costs upon industry that are fairly high, and therefore, require economic justification. This justification can be given by estimating the benefits associated with these costs. The objective of the present paper is to estimate the economic value that people in an urban area in India - PTPS (Panipat Thermal Power Station) Colony in Panipat, Haryana - place upon improving the air quality. The dose-response method, based on the Gerking and Stanley model, is used to estimate the economic benefits of air quality improvement. These estimates range 1%-2% of monthly income. Income and health status variables were significant determinants of peoples' willingness to pay for air quality improvements. This lends support to the neo-conventional wisdom 'act now to protect the environment before it is too late'. These people are ready to pay for environmental improvements. The authors do believe, however, that the relatively successful application of the dose response method at PTPS colony suggests that the technique can be more widely applied in developing countries like India.
(2 tables, 16 references)
Environmental and Resource Economics20(2):91–102
Centre for Economic studies and planning,
School of Social Science, Jawaharlal Nehru Univerisity, New Delhi - 110 067, India


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