Willingness to Pay for Improvements in Air Quality

Central to the discussion of air quality degradation is its effect on health and the costs that it may impose on the health care system and the individuals whose health has been affected. Estimating the monetary benefits associated with improved air quality is problematic, as air (and its quality) is a public goods. By employing daily environmental data from Montreal and the Quebec Health Survey, a component of individuals’ willingness to pay for reductions in ozone is estimated building on the work of Gerking and Stanley (1986). The results suggest a significant relationship between ozone levels, health status and medical care consumption. The results also suggest that the monetary benefits from reducing ozone levels are greater than previously estimated.