Methods and Results from a New Survey of Values for Eastern Regional Haze Improvements

Abstract

A contingent valuation survey was designed and implemented in 2003 to elicit the willingness to pay for haze reduction in scenic areas of the Eastern United States. This survey updated and enhanced a portion of a 1988 survey, Chestnut and Rowe’s Preservation Values Study, which is commonly used to estimate benefits of haze reduction policies. The 2003 survey incorporated features to address criticisms of the 1988 survey regarding its lack of budget constraints and its simplistic descriptions of changes in visibility. In preparing the new survey, we identified a fundamental error in the 1988 survey regarding the amount of visibility change that respondents were asked to value. When corrected, it reduces the estimates in that study of willingness to pay per unit of visibility change by ~40%. More importantly, we estimate that haze reduction benefits based on that study are overstated by ~70%. Results from our 2003 survey demonstrate that the distribution of willingness to pay is highly skewed, which implies that a haze reduction policy of which the costs per person are equal to the average willingness to pay would be rejected by between 70% and 80% of the public if subjected to a majority vote. Moreover, estimates of willingness to pay are sensitive to how respondents are reminded of their budget constraints. We find a statistically significant decline in willingness to pay when budgetary reminders are included. Finally, we find evidence that a large portion of the willingness to pay appears to be associated with improvement on the worst condition days. Little additional value appears to be associated with improvements to the majority of days that have haze conditions nearer the average. These survey results have important implications for policy making on haze reduction.