Air Quality and Episodes of Acute Respiratory Illness in Taiwan Cities: Evidence from Survey Data

Abstract

This paper reports on a unique study that records daily health status for over 900 residents of three urban areas in Taiwan and elicits their willingness to pay (WTP) to avoid episodes of illness. Incidence of illness is related to the ambient concentration levels of particulate matter, but the effects are much less pronounced than we would expect from earlier U.S. studies. Willingness to pay to avoid illness is considerably higher than that predicted by extrapolations of U.S. studies that rely on simple income adjustments. We argue that extrapolations from U.S. studies may be inadequate for predicting the benefits of reduced pollution levels in developing countries.