Show simple item record Bayer, P Keohane, N Timmins, C 2010-03-09T15:41:35Z 2009-07-01
dc.identifier.citation Journal of Environmental Economics and Management, 2009, 58 (1), pp. 1 - 14
dc.identifier.issn 0095-0696
dc.description.abstract Conventional hedonic techniques for estimating the value of local amenities rely on the assumption that households move freely among locations. We show that when moving is costly, the variation in housing prices and wages across locations may no longer reflect the value of differences in local amenities. We develop an alternative discrete-choice approach that models the household location decision directly, and we apply it to the case of air quality in US metro areas in 1990 and 2000. Because air pollution is likely to be correlated with unobservable local characteristics such as economic activity, we instrument for air quality using the contribution of distant sources to local pollution-excluding emissions from local sources, which are most likely to be correlated with local conditions. Our model yields an estimated elasticity of willingness to pay with respect to air quality of 0.34-0.42. These estimates imply that the median household would pay $149-$185 (in constant 1982-1984 dollars) for a one-unit reduction in average ambient concentrations of particulate matter. These estimates are three times greater than the marginal willingness to pay estimated by a conventional hedonic model using the same data. Our results are robust to a range of covariates, instrumenting strategies, and functional form assumptions. The findings also confirm the importance of instrumenting for local air pollution. © 2009 Elsevier Inc. All rights reserved.
dc.format.extent 1 - 14
dc.format.mimetype application/pdf
dc.language.iso en_US
dc.relation.ispartof Journal of Environmental Economics and Management
dc.relation.isversionof 10.1016/j.jeem.2008.08.004
dc.title Migration and hedonic valuation: The case of air quality
dc.type Journal Article
dc.department Economics
pubs.issue 1
pubs.organisational-group /Duke
pubs.organisational-group /Duke/Nicholas School of the Environment
pubs.organisational-group /Duke/Nicholas School of the Environment/Environmental Sciences and Policy
pubs.organisational-group /Duke/Sanford School of Public Policy
pubs.organisational-group /Duke/Sanford School of Public Policy/Duke Population Research Institute
pubs.organisational-group /Duke/Sanford School of Public Policy/Duke Population Research Institute/Duke Population Research Center
pubs.organisational-group /Duke/Trinity College of Arts & Sciences
pubs.organisational-group /Duke/Trinity College of Arts & Sciences/Economics
pubs.publication-status Published
pubs.volume 58
dc.identifier.eissn 1096-0449

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