Date(s): September 14, 2012, 10:30-12:00pm

Location: Room 4150, EPA West Building, 1301 Constitution Ave., NW, Washington, DC

Contact: Carl Pasurka, 202-566-2275

Presenter(s): V. Kerry Smith (Department of Economics, Arizona State University)

Description: Children and the elderly are the groups most impacted by the criteria air pollutants. Conventional practices in measuring the benefits attributed to policies that reduce air pollution treat each individual as a distinct economic agent, capable of responding independently to the health consequences of that pollution. Our research begins from the recognition that this maintained hypothesis is ill-suited to the groups most sensitive to air pollution; children and the elderly rely on the caregiving services provided by other members of their households. As a result, factors that affect the health status of the sensitive groups can also increase these caregiving needs. This means they affect their caregivers, and measures of the economic benefits of reducing criteria air pollutants should be adapted to reflect these interdependencies.

This project is the first effort to address the unique challenges associated with integrating caregiving impacts of environmental quality improvements into the structure of economic methods used to measure the benefits of proposed policy changes. This presentation highlights four aspects of our research:

1. We outline a new set of preference restrictions consistent with modeling how environmental quality affects sensitive groups and their caregivers.
2. We provide a summary of the challenges (1) in framing stated preference choice questions that adequately capture how environmental policies would affect the public and private nature of the attributes associated with proposed goods/services that are provided by those policies; and (2) in assessing how caregivers perceive the associated tradeoffs among environmental quality, the health of members of sensitive groups, time spent providing care, and monetary resources
3. We report preliminary results from two stated preference surveys designed to help understand how changes in caregiving needs translate into benefits for caregivers. Understanding the general constraints faced by caregivers for children and the elderly is a necessary step to the reforms required in benefit measurement methods to incorporate caregiving into estimates of the benefits of improved air quality.
4. We describe how multiple sources of information from complementary samples can be used in structural economic models to estimate the tradeoffs people would make to realize improved environmental services.

Seminar Category: Environmental Economics