Air pollution and its economic impacts at household level: willingness to pay for environmental services in Pakistan
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RESEARCH ARTICLE
Air pollution and its economic impacts at household level: willingness to pay for environmental services in Pakistan Quratul Ain 1 & Raza Ullah 1 & Muhammad Asif Kamran 1 & Farhad Zulfiqar 2 Received: 6 April 2020 / Accepted: 27 September 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract Air pollution has become a major global problem. Thus, the goal of this study was to find out the economic impacts (treatment cost) of air pollution on households as well as the principal factors inducing an individual’s willingness to pay for better air quality. District Faisalabad was purposively selected for sampling, as it is a major industrial hub in Pakistan. The required information was collected from 120 sampled respondents through a structured questionnaire. The ordinary least squares method was used for assessing the impact of various factors on the treatment cost of the most recent episode of ailment related to air pollution. The ordered logit model was used to assess the impacts of factors affecting the willingness to pay for programs aimed at the provision of better environmental services. The results revealed that high air pollution in the urban area resulted in more lost workdays and higher health costs. The findings also showed that people were willing to pay for better air quality in urban areas than in rural areas. Based on the findings, it is suggested that the incentive schemes may be designed for the promotion of cleaner services in rural and urban areas. Keywords Air pollution . Air quality . Environmental services . Order logit model . Willingness to pay . Urban pollution . Rural pollution
Introduction The provision of clean air is a basic need for a healthy life and a prime objective of the air quality strategies of countries around the globe. However, many developing countries are under severe threats of air pollution (Zou et al. 2016). Rapid industrialization along with rapid growth in transportation, traditional biomass fuels, poor environmental regulations, inefficient production technologies, congested roads, and poor Article highlights • The economic costs of air pollution include lost workdays and extra health expenditures • Higher exposure to air pollution resulted in a higher willingness to pay for environmental services • Urban households’ willingness to pay was greater than rural households Responsible Editor: Philippe Garrigues * Farhad Zulfiqar [email protected]; [email protected] 1
Institute of Agricultural and Resource Economics, University of Agriculture Faisalabad, Faisalabad, Pakistan
2
Department of Economics, Faculty of Business Administration, COMSATS University Islamabad, Islamabad 45550, Pakistan
maintenance of vehicles are among the leading causes significantly contributing towards air pollution (Israel-Akinbo 2012; Almetwally et al. 2020). Previous studies have shown that many main towns in developed and developing countries have experienced severe air pollution that can threaten environmental sustainability and put huma
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