Valuing the Effects of Air and Noise Pollution on Health Status in Turkey

Abstract

This study explores the determinants of health status in Turkey. Moreover, this study explores the willingness to pay for reducing the air and noise pollution. The estimates are based on data from the annual Income and Living Conditions Survey (ILCS) in Turkey which took place in period 2006-2012. The effects of air and noise pollution on individuals’ health status and whether an individual suffers from chronic illness are estimated and their monetary value is calculated. This is the first study which examines the effects of noise and air pollution in Turkey using a great variety of econometric models as ordered Logit and binary Logit models for cross sectional data. Moreover using a pseudo panel data created based on age and region cohorts various panel data econometric approaches are followed. Regarding the health status the first model is the adapted Probit fixed effects, the “Blow-Up and Cluster” (BUC) and Ferrer-i-Carbonell and Frijters (FCF) estimators to account for intercept heterogeneity. The second approach is the Random Effects Generalized Logit Model to account for slope heterogeneity. Finally, two and three stage least squares instrumental variables approaches are followed using wind direction and regional complaint rates on air and noise pollution as instruments. Income and education are the most important determinants of health status. Based on the favoured estimates individuals who reported problems with air and noise pollution are willing to pay for air and noise quality improvement more by 20.00-21.00 Turkish Liras (TL) and 22.80-25.00 TL respectively than the individuals than did not report any complaint. Finally, the MWTP values of air and noise pollution effects on wages, working hours lost, house rents and expenses and moving dwelling are calculated.