Abstract
This study aims to value air quality from the urban housing market in Yogyakarta City. It is also provides estimation of marginal willingness to pay for the air quality improvement and estimation of the consumer surplus due to reduce of air quality. The methodological framework for estimation is based on a hedonic price model. The result of hedonic price method concludes that by adopting a two-stage estimation procedure to estimate the relationship between air quality and property value, on the average, an increase in the level of O3 by one percent will increases the property price by 0.063 percent. By using a health production function and demand function mitigation can be seen that the medical history of the individual has effect on the number of working days lost. Meanwhile, O3 pollution has positive effect on the amount of medical expenses for mitigation. Decreasing in O3 pollution causes a decrease in the level of medical expenses to mitigate. Therefore, it is important to reduce the negative impacts of air pollution.
Highlights
The increasing number of land conversion and lack of green open spaces in urban areas is one of the consequences of the increase in economic activities in urban areas
Model hedonic price was used to estimate the benefits of reducing air pollution to levels that are safe for local households in the cities of Delhi and Kolkata in India among other health benefits, convenience and environmental benefits of reducing air pollution in urban areas can be estimated by using a model of hedonic price through household survey
Total benefits consisting of health benefits, and environmental benefits of ease of O3 pollution reduction can be estimated using a model of hedonic price models
Summary
The increasing number of land conversion and lack of green open spaces in urban areas is one of the consequences of the increase in economic activities in urban areas. It is characterized by the increasing number of residential, industrial, commercial centers and others. Model hedonic price was used to estimate the benefits of reducing air pollution to levels that are safe for local households in the cities of Delhi and Kolkata in India among other health benefits, convenience and environmental benefits of reducing air pollution in urban areas can be estimated by using a model of hedonic price through household survey. Total benefits consisting of health benefits, and environmental benefits of ease of O3 pollution reduction can be estimated using a model of hedonic price models
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