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Abstract
Using biodiesel fuel to reduce emissions from diesel engines is an area of increasing
interest. Many environmental benefits associated with biodiesel are not traded in markets and
their estimation requires economic valuation methods applied to non-market goods and services.
This paper presents the results of a contingent valuation survey conducted in 2006 in two Ohio
regions to estimate willingness to pay for air pollution reduction arising from using biodiesel fuel
in diesel engines. The double bounded parametric formulation was used to estimate mean WTP
ranging from $157 to $457. These results yield estimated aggregate benefits ranging from $123
to $429 million and can be used as a starting point for cost-benefit analysis.