Determine the willingness to pay for improved air quality in Tehran

Subject Areas : Environmental Economics

ehsan asgharzad ¹ , Kambiz Hojabr kiani ² , Ali Emami Meybodi ³ , Farid Asgari ⁴

1 - Ph.D. Student In Economic, Islamic Azad University, Abhar, Iran.
2 - Professor, Department Of Economics, Tehran Science And Research Branch, Islamic Azad University, Tehran, Iran * (Corresponding Author)
3 - Associate Professor, Department Of Energy Economics, Faculty Of Economic, Allameh Tabatabai University, Tehran, Iran
4 - Assistant Professor, Faculty Of Economics, Islamic Azad University, Abhar, Iran

Received: 2019-05-12 Accepted : 2019-10-28 Published : 2021-02-19

Keywords: The Housing Market, Air pollution, Hedonic Pricing, Environmental Valuation,

Abstract :

B Background and Objective: Due to the need for citizens to be aware of the value of clean air and the impact of pollution on their assets, as well as the possibility of better analysis of projects and compare them with each other and selecting the best and least expensive project for policy makers and economic planners, this study The value of clean air and the willingness to pay to improve air quality has been estimated by citizens in the metropolis of Tehran. Method: In contrast to the conventional economic method in which the value of a commodity is calculated for all commodity availability, hedonic is a method by which the value of enjoyment is determined by the characteristics of a commodity. The hedonic pricing method is the observed price of a commodity regression On its qualitative attributes, therefore, it can be said that hedonic method considers the demand of a product or input as a function of its characteristics. In this research, we used the data of the transactions carried out in the housing market of Tehran during the period of 1395 and based on the three structural, neighborhood and environmental characteristics we have estimated the price of the Tehran's hedonic price function. Accordingly, 7141 samples of real transactions were collected by simple random sampling from 22 areas of Tehran. Findings: The results show that 81 percent of logarithmic changes in housing prices are explained by selected variables in a two-way logarithmic model. Most of the variables used are meaningful and have an expected sign. Also, using the implicit derivative, the coefficient of air quality index is estimated from the function of the hedonic price. Discussion and Conclusion: The final desire to pay for a unit of air quality index (improvement of air quality index) for each household in Tehran is equal to the figure of about 3 million rials. According to the average purchase area of ​​72 square meters in Tehran, the final desire to pay per square meter is 42 thousand Rials.

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