Willingness to pay for staying away from haze: Evidence from a quasi-natural experiment in Xi'an

Previous studies of the residents' willingness to pay (WTP) for air quality improvement are likely suffering various endogeneity biases. Exploiting the unique opportunity of a recent quasi-experiment operation of the world's first SFT (Smog Free Tower) in China's northwestern city Xi'an, this paper reliably calibrates local residents' WTP for less exposure to haze by analyzing the price responses of housings in the neighborhoods of SFT. The hedonic regression is applied in the DID (difference-in-difference) setting, with further assistances of the PSM (propensity score matching) method, quantile regression and placebo test. The regression results consistently suggest that housing price responded positively to the installment of the SFT, and the impact estimates are closely centered around 4%. The study also indicates high-priced housings response much more to the operation of the SFT than cheap-priced housings, suggesting uneven distribution of welfare gains of air quality improvement. A cost-benefit analysis of the SFT project indicates that the economic benefits of this project far outweigh the costs involved. The paper concludes with discussions of policy implications of this paper for environment governance.

先前关于居民对空气质量改善的支付意愿（WTP）的研究可能存在各种内生性偏差。利用世界上第一座雾霾净化塔（SFT）在中国西北城市西安近期的一次准实验运行这一独特机会，本文通过分析雾霾净化塔周边房屋的价格反应，可靠地校准了当地居民为减少雾霾暴露的支付意愿。在双重差分（DID）设定中应用特征价格回归，并进一步借助倾向得分匹配（PSM）方法、分位数回归和安慰剂检验。回归结果一致表明，房价对雾霾净化塔的安装有正向反应，影响估计值紧密集中在4%左右。研究还表明，高价房屋对雾霾净化塔运行的反应比低价房屋大得多，这表明空气质量改善的福利收益分布不均。对雾霾净化塔项目的成本效益分析表明，该项目的经济效益远远超过所涉及的成本。本文最后讨论了本文对环境治理的政策启示。