Willingness to pay for ozone control: Inferences from the demand for medical care

Abstract The paper applies a discrete choice version of the household production approach to the valuation of nonmarket goods. Willingness to pay for tropospheric ozone control is estimated using medical care demand under assumptions of input necessity and weak complementarity. In example calculations, individuals living in high ozone areas are willing to pay over $170 annually for an environment in which ozone concentrations never exceed 12 pphm. Willingness to pay figures are two to four times larger than medical expense savings caused by the same ozone reductions. Estimates obtained are compared with results of previous studies, and proposed ozone control measures are discussed.

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