Are people willing to pay to reduce air pollution? A Shanghai case study says yes

Due to rapid industrialization and urbanization, many cities in China face air pollution and associated environmental health issues. Shanghai, one of the nation's largest and most developed cities, is no exception to deteriorated environmental conditions. Children face increased risk of contracting respiratory diseases compared to healthy adults. Alleviation of air pollution not only requires effective governmental leadership, but mobilization and contribution from residents are also important factors.
 
In a recent project, Keran Wang and a group of researchers from Fudan University and University of Hawaii at Manoa, Honolulu collaborated to measure Shanghai residents' willingness to pay, or willingness to make financial contributions to improve air quality. Specifically, the researchers studied whether and to what extent parents in Shanghai are willing to pay to reduce air pollution for their children's health.
 
Between April and May 2014, the researchers conducted 975 face-to-face interviews with parents in a community-based setting in Shanghai's Jiading district and in a hospital setting in Shanghai's Minhang district.  In addition to asking about their their willingness to pay, the researchers also gathered information on respondents' demographic, socio-economic status, perception of the current air pollution level in their residence area, and how much theyd be willing to pay. The researchers then applied the Contingent Valuation Method (CVM) to analyze the data collected. CVM is a common method used in the environmental health field to evaluate and quantify a person's willingness to pay for better environmental services.
 
The results show that most respondents are willing to pay to reduce air pollution in both settings. Of respondents in the hospital setting, 70.2 percent were willing to make financial contribution, with an average amount of $80.70. Comparatively, 52.6 percent of respondents in the community setting were willing to pay, with an average amount of $68.50. For people who did not demonstrate willingness to pay, reasons include a lack of income and the belief that improving air quality should be a communal issue rather than an individual problem.
 
Wang's research has important implications for fundraising, revealing the financial resources that a local authority can potentially gather from residents to combat air pollution. Financial contribution could be one way non-state and local actors participate and hold governments accountable for improving air quality and environmental health.