A BEJEAP Contributions article.

Abstract

Several different theoretical models of economic growth and environmental quality each generate inverse-U-shaped pollution-income paths, or "environmental Kuznets curves." They rely on different assumptions to generate the reversal of pollution trends, with correspondingly different policy implications. While the empirical implications for pollution are indistinguishable (by design), the models have distinct implications for the pattern of people's marginal willingness to pay (MWTP) for environmental improvements as a function of income. In this paper we demonstrate those different implications theoretically, and test for them empirically using data from the World Value Survey (WVS). We find strong relationships between MWTP and individual characteristics, such as age, income, and education, but little evidence that MWTP varies systematically with economic growth.

Submitted: December 19, 2003 · Accepted: January 20, 2004 · Published: February 17, 2004

Originally published in Contributions to Economic Analysis & Policy.

Recommended Citation

Israel, Debra and Levinson, Arik (2004) "Willingness to Pay for Environmental Quality: Testable Empirical Implications of the Growth and Environment Literature," Contributions to Economic Analysis & Policy: Vol. 3 : Iss. 1, Article 2.
Available at: http://www.bepress.com/bejeap/contributions/vol3/iss1/art2

Readers' Reactions

David E. Bloom and Jaypee Sevilla, Willingness to Pay for Environmental Quality: Testable Empirical Implications of the Growth and Environment Literature: Comment (July 2004)