1130, rue Sherbrooke Ouest, suite 1400, Montréal, QC H3A 2M8
Guy Martial Takam Fongang (doctorant, UQAM)
Value of Direct Seeding Mulch-Based Cropping System to Field Crop Farmers
Endogeneity of Income Elasticity of Willingness to Pay for Better Air Quality: Substitution Effect from a Closer Private Environmental SubstituteAbstract : In this paper, based on a contingent valuation survey on people’s WTP for better air quality in the city of Nanjing, China, we estimate the income elasticity of WTP. Our results report lower-than-one income elasticity of WTP, for both a public air quality improvement project and a private vaccine. The split-sample strategy adopted in our survey also allows us to reveal that the income elasticity of WTP for a private vaccine is more than two times higher than that of the public air quality improvement project. Our estimates reveal the lower-than-one income elasticity of WTP for better air quality can be further reduced due to the presence of substitute in the bundle of people’s private consumption goods. However, such pattern in income elasticity is found to be significant only for WTP for the public air quality improvement project and when the private substitute occupies a significant share in people’s income. Based on our estimate and the information about the share of household purchasing air purifier for different income levels, we reproduced a Drupp et al. (2018) style graphical analysis and find the income inequality and existence of private preventive substitute can result in a much earlier bending down in the curvature of the relationship between WTP and income, therefore reinforce the influence of inequality income on societal mean WTP for public air quality improvement project.