Measuring the Economic Benefits of Air Quality Improvement and Investigation the Risk Attitude Towards Acid Rain in Taiwan's Metropolitan Areas

All of these doubt pose obstacles to the smooth implementation of the APCF policy. In order to implement the APCF policy efficiently, it is crucial to evaluate the benefits and costs of the policy. The purpose of this research is use the contingent valuation method to estimate people's economic benefits gained from improving air quality in Taiwan's metropolitan areas, including Taipei, Taichung,and Kaoshiung.

The economic benefits contain four parts: visibility benefit, cleanness benefit of decreasing building's erosions. Also, the general public's attitude and knowledge toward acid rain will be investigated. The results of this research will provide some insights on the APCF policy.

In the visibility benefit model, people tend to pay less to improve air quality if they are older or, on average, participate more outdoor activities. In contrast, those who work, have higher income and education level, and frequently exposed to the polluted environments are willing to pay more to improve air quality. Besides, the empirical study shows that people's attitude to the theory of decreasing marginal utility of visibility.

As to the health benefit model, symptoms such as eye irritation, asthma, headache, respiration problems, cardiovascular disease, and skin problems are considered. The empirical result shows that people with troubled respiration system pay higher WTP, but people with headache-related problems pay smaller WTP. On the contrary, asthma and eye irritation that are normally believed to be related to air pollution actually do not affect people's WTP.

Moreover, when other factors remain unchanged, people from Taipei pay the greatest WTP, then Taichung, and the least is Kaoshiung. Other than that, different level of air quality improvement also affects people's WTP; this conforms to the theory of decreasing marginal utility of air quality. In the cleanness benefit model, people have better education, work, spend more money on cleaning, are in charge of cleaning the house pay higher WTP, but time spent on doing such does not affect their WTP.

This may be due to the reason that interviewees are not necessarily the ones who are responsible for household cleaning and laundry. Since area dummy variables are very significantly in this model, people of the three metropolitan areas gain different cleaning benefit. While other factors remain unchanged, people from Kaoshiung have the greatest WTP, followed by Taichung and Taipei.

In the model of benefit of decreasing erosions, people work, have better education and higher income, spend more time in the outdoors pay higher WTP, This is also true for those who themselves spend more time on caring or repairing automobiles and building. In contrast, people who pay more money to have their automobiles washed pay less WTP. Moreover, people are WTP for the erosions benefit does not vary significantly among the three metropolitan areas.

The project shows the three metropolitan areas receive different levels in the four economic benefits by improving air quality. According from greatest to least, Taipei receives cleanness benefit, health benefit, benefit of decreasing erosions, and visibility benefit. Taichung and Kaoshiung also benefit the greatest in cleanness and then health.

As for the level of benefit in decreasing erosions and visibility, it depends on the level of air quality improvement. When improvement is small, the visibility benefit is greater than benefit of decreasing erosions, and vice versa. In the year of 1996, 6 billion 930 million NT dollars of APCF has been collected.

The pollutant emission amount also decreases by 20% (TSP: 25%, Sox: 18%, Nox: 22%, CH: 20%). According to this project's estimation, when present air quality improve 20%, the total benefits amount to 17 billion 358 million NT dollars. If only considering the considering the economic benefit for people over 20 years old, the total benefits amount to 11 billion 471 million NT dollars.

Therefore, if that 6 billion 930 million NT dollars APCF can reach the goal of 20% air quality improvement, the public social benefits will far exceed the costs. The population of the three metropolitan areas is only half of entire population in Taiwan. Thus, if the economic benefit estimation takes in the entire Taiwan area, the public social benefit will even be greater.IN this case, the social optimum level for air quality improvement should be greater than the anticipated 20%.