Essays on contingent valuation and air quality improvement in Poland

This dissertation examines benefits from the policy of environmental standard harmonization and addresses methodological issues of protesters and common uncertainty in Contingent Valuation Method (CVM). Both the policy and methodological aspects of this research are discussed on a case study of Poland harmonizing its air quality standards with the EU standards.; In Chapter 1, an alternative method of identifying and truncating protesters in Contingent Valuation surveys. This methodological improvement is especially relevant to transition economies where the protest rate may be particularly high. A system of willingness to pay (WTP) questions is proposed to value multiple goods using both discrete choice and open-ended questions. It is recommended to ask the whole sample multiple questions about protest beliefs. Protesters can then be identified because they reject all bids, declare zero on all open-ended questions and express protest beliefs. Application of the proposed procedure to the Polish data set shows that protesters are 27 percent of the sample. The WTP estimated on the sample adjusted for protesters is over tree times higher than WTP from unadjusted sample.; In Chapter 2, the policy aspect of the research is addressed. The estimation of WTP is conducted using both a set of single logit models and a Generalized Estimating Equations (GEE) model. GEE produces a more parsimonious model and more efficient parameters' estimates. Therefore, GEE is recommend as a superior method to single logits for system valuation. The research shows also that the two damage components that are often omitted in valuation studies (damages to ecosystems and cultural heritage) are valuable to Polish respondents. They compose 13–16% of the total value. This suggests that both components should be tested for importance in future air quality valuation. The results show also that morbidity receives higher values than it had in the past studies. Additionally, estimates from both GEE and single models support the assumption of unitary income elasticity. This result has practical consequences for benefit transfer analysis.; The benefits estimated for Poland are a fraction of income that closely corresponds to values estimated in western studies. However, since the EU is about four times more wealthy than Poland, the benefits in Poland are only a quarter of the benefits in the EU.; In Chapter 3, the impact of common scientific uncertainty on willingness to pay is analyzed. Common uncertainty is a consequence of our limited knowledge about the impact of most environmental and natural resource changes. Most environmental changes are associated with small portions of people's wealth. Therefore, common uncertainty generally causes only small variations in individual's incomes. It is hypothesized there that individuals faced with uncertainties that are small enough behave as if they were risk neutral. The hypothesis follows from Segal and Spivak (1990) argument that in the neighborhood of the expected value small changes in outcomes lead to negligible differences in the marginal utility of income. This research support this hypothesis, showing that respondents facing common uncertainty declare similar values to respondents facing certain outcomes. (Abstract shortened by UMI.)...