Who counts in evaluating the effects of air pollution policies on
households? Non-market valuation in the presence
Mary F. Evans
, Christine Poulos
, V. Kerry Smith
The Robert Day School of Economics and Finance, Claremont McKenna College, 500 E. Ninth Street, Claremont, CA 91711, USA
RTI International, Research Triangle Park, NC, USA
Department of Economics, Arizona State University, Tempe, AZ, USA
Resources for the Future, Washington, DC, USA
National Bureau of Economic Research, Cambridge, MA, USA
Received 21 August 2009
Available online 8 March 2011
Household decision making
Individuals who are likely to realize the largest beneﬁts from improvements in air
quality often depend on other members of their households to make time or monetary
contributions to their care. The presence of these dependency relationships among
household members poses challenges for beneﬁt estimation since it is unlikely that the
conditions necessary for recovering the underlying individual preferences from house-
hold choices are satisﬁed in this setting. We propose a conceptual framework that
highlights the role of these dependencies in the choice models used to estimate the
willingness to pay for environmental quality improvements. We design a complemen-
tary stated preference survey that describes hypothetical dependency relationships for
household members of different ages to test the implications of our conceptual model.
Respondents’ stated choices take into account the proposed care-giving responsibilities
for young children and teenagers but not for older adults.
& 2011 Elsevier Inc. All rights reserved.
When does a child become an economic agent? When do the limitations that arise with advanced age and/or serious
health conditions create the need for assistance with decision-making or other tasks? How do these transitions into and
out of economic agency affect dependencies among family members, such as those associated with care-giving activities?
Answers to these questions have implications for a wide range of policy settings. In the context of environmental policy,
their relevance depends on whether and how the beneﬁts from an improvement in environmental quality change once
these dependency relationships are taken into account. To illustrate, consider the case of improvements in air quality. The
criteria air pollutants primarily impact two groups: young children and older adults.
These groups often depend on others
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journal homepage: www.elsevier.com/locate/jeem
Environmental Economics and Management
0095-0696/$ - see front matter & 2011 Elsevier Inc. All rights reserved.
The U.S. Environmental Protection Agency (EPA) provided funding for this research under STAR Grants RD-83159502-0. The research has not been
subjected to EPA review and therefore does not necessarily reﬂect the views of the Agency, and no ofﬁcial endorsement should be inferred.
Thanks are due to Sandra Hoffmann, Reed Walker, and two anonymous referees for very constructive comments on several earlier drafts of this
Corresponding author. Fax: þ1 909 621 8249.
E-mail address: email@example.com (M.F. Evans).
See Chay and Greenstone , Currie and Neidell , and Evans and Smith .
Journal of Environmental Economics and Management 62 (2011) 65–79