The comparison of discrete payment vehicle methods (dichotomous choice) in improving the quality of the environment

Using methods to estimate the value of environmental goods seems to be essential for economic planning and moving toward development. In this paper, using methods of discrete payment vehicle (dichotomous choice), i.e., single-bounded and Double-Bounded Dichotomous Choice, the value of air pollution in Tehran and households’ willingness to pay to improve air quality, in four selected regions (Shahr-e-Ray, Shoosh, Haft-e-Tir and Tajrish) is estimated and the corresponding results of these two techniques were compared. The results showed that the total value of air quality improvement, calculated through two techniques of Double-Bounded and Single-Bounded Dichotomous Choice were, respectively, 2,398,657,500 and 1,492,566,000 thousands Rials (1USD = 35,000R) in a year and weighted mean of each citizen’s willingness to pay to improve air quality, calculated through these two methods was estimated to be 282,192 and 175,596 Rials in a year, respectively. Considering the annual damage to health, for any 1% increase in pollutants and yearly cost of pollution reduction which are, respectively, 1,199,000,000 and 7,336,000,000 thousands Rials, it was determined that citizens’ willingness to pay through two methods includes 20 and 30% of the cost of pollution control, respectively, while 70% of pollution is due to mobile sources. However, citizens’ low willingness to pay is attributed to citizens’ distrust of government policies as well as their ignorance of the harmful effects of air pollution. In general, the results of this study, with regard to the cost of pollution from Single- Bounded Dichotomous Choice are closer to actual market conditions.

Environmental economics  Contingent valuation  Techniques of single-bounded  Techniques of double-bounded  Dichotomous choice