Health Benefits and Industrial Air Pollution: A Comparison between People’s Willingness to Accept and the Opportunity Cost of Health Risk

The disparity between willingness to accept (WTA) health risks and actual health risks arising from environmental pollution has not been demonstrated well in the literature. This study provides evidence on WTA for bearing existing health risks arising from environmental pollution caused by the Limestone Industry in Sri Lanka. It compares mean WTA with monthly average health expenditure as well as the opportunity cost of health risk. The study finds that the average monthly health expenditure, averting expenditure and lost earning per person were Rs. 168, Rs. 85 and Rs. 262 respectively. Accordingly, opportunity cost of the health damage was Rs. 515 while mean willingness to accept was Rs. 792 per person. Results clearly show that mean WTA estimates tends to overestimate the true cost. The study also summarizes reasons for the disparity and then discusses some of the key implications of the analysis.

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Journal Article
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Sri Lankan Journal of Agricultural Economics, Volume 14-15
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 Record created 2017-04-01, last modified 2017-08-28

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