Knowledge Globalization Conference, 13th International Knowledge Globalization Confernece 2018

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Clean Air, Health and Wellbeing: The Case of Environmental Valuation in India

Chirodip Majumdar

Last modified: 2018-01-13

Abstract


Revealed preference (RP) and stated preference (SP) techniques are the two more familiar approaches of valuation of non-marketed goods and services.  An alternative approach to such valuation rests on observing the impact of a change in the provision of a non-marketed good or service on happiness.  The approach is commonly known as the happiness or life satisfaction approach of non-market valuation.  This paper offers a brief background of RP and SP techniques and further extends to discuss the happiness approach of valuation.  Further, the paper uses the 5th wave of World Values Survey (WVS) data to measure willingness to pay (WTP) for air quality in India by applying the happiness approach.  It is found that respondents those who perceive their local air quality as poor are less happy and respondents are eager to pay for improvement in local air quality.  A 1 % change in air quality standard is associated with around 1.1% change in income to keep happiness constant.