Valuing Acute Health Risks of Air Pollution in the Jinchuan Mining Area, China: A Choice Experiment with Perceived Exposure and Hazardousness as Co-Determinants

Abstract

This paper analyzes the choice of illness-cure combinations to estimate people’s willingness to pay (WTP) for the reduction of acute health risks correlated with air pollution caused by mining and smelting in the Jinchuan mining area, China. To improve explaining the power of choice experiment (CE), a random parameter logit model (RPL) was employed and extended by considering rank ordered choice sets and non-linear effects of health risk perception on choice behaviors. The results of this study indicated that the ordered RPL approach produced better results than the unordered alternative after comparing different modeling techniques. Perceived health risk, illness attributes, and the residents’ external characteristics: income, education, age, family health experience, work environment and proximity to pollution source are important determinants of the Jinchuan people’s choice mode for avoiding acute health risks caused by air pollution. Taking all acute illnesses investigated together, the mean Jinchuan household WTP for reducing acute health risk caused by air pollution is 146.69 RMB (abbreviation of Chinese yuan) per year (US$23.38, 0.31% of average yearly household income). On the basis of our findings, we conclude that virtually Jinchuan residents perceive air pollution as a serious health risk. To assist the residents to take appropriate preventive action, the local government should develop counseling and educational campaigns and institutionalize disclosure of air quality conditions.