Using a Choice Experiment to Estimate the Benefits of a Reduction of Externalities in Urban Areas with Special Focus on Electrosmog

Noise, air pollution and electromagnetic pollution (i.e. non-ionizing radiation, also called electrosmog) are typical negative local externalities in urban areas. They are side-effects of human and economic activity (e.g. road transport, telecommunication) and affect individuals’ well-being negatively without compensation. Measurements carried out in 2005 and 2006 show that in several Swiss cities the limit values of air pollution fixed in the Swiss law have often been exceeded. Moreover, in several areas of these cities also the day and night standards for the noise level were violated. Further, the increased number of mobile phone antennas in residential areas, and thus the increased intensity of radiated power, has, in recent years, aroused public concern, discussions and protests. The view of an antenna is annoying an increasing number of inhabitants. In order to solve these problems, policy-makers have to introduce new environmental instruments to improve the quality of the environment in the Swiss cities. This paper aims at giving policy-makers information on benefits generated by an improvement of local environmental quality. In two Swiss cities (Lugano and Zurich), stated choice experiment is used to estimate the benefits of a reduction of the level of the negative externalities mentioned above. Results from this choice experiment reveal that there is a positive and significant willingness to pay (WTP) for a reduction of the level of air pollution and noise to those limit values fixed by the government. In addition, this is the first study that uses a stated preference approach based on a choice experiment for the estimation of the benefit of a reduction of electrosmog.