willingness to pay (WTP) varies between INR 12 and INR 53 per month for
improving the air quality to WHO standards. Using a similar model, Murty et al.
(2003) observed that a representative household gains about INR 2086 and INR 950
per annum due to reduced morbidity from reduction of air pollution to the safe level
in Delhi and Kolkata, respectively. Similarly, Gupta (2008) estimates aggregate
benefits of the magnitude of INR 225 million per year reducing air pollution to the
safe level for the city of Kanpur, India. Note that these studies are restricted to
measure the monetary value of reducing urban air pollution to the safe level since
air pollution has been considered mainly the problem of urban areas. In the present
study, we use a similar consumer choice model to get the monetary estimates of
reduced air pollution level to the safe level for the rural Punjab.
We use data of 625 individuals collected from a household level survey conducted in three villages, namely Dhanauri, Ajnoda Kalan, and Simro of Patiala
district of Punjab for 150 households. To get the monetary values we estimate two
equations: one with mitigation expenditure and the other with workdays lost as
dependent variables. Tobit and Poisson models are found to be suitable for estimating mitigation expenditure and workdays lost equations, respectively. We find
that total annual welfare loss in terms of health damages due to air pollution caused
by the burning of rice straw in rural Punjab amounts to INR 76 millions.
The paper is organized as follows: Sect. 2 presents the ambient air quality levels
in the study villages during the period when harvesting of rice takes place.
Section 3 gives details of the design of the household survey and analyzes the
households’ behavior. Section 4 describes the theoretical model and estimation
strategy. The results are discussed in Sect. 5, while last section concludes the paper.
2 Ambient Air Quality Level in Study Area
In Punjab, it is common practice to openly burn agricultural residues in fields after
harvesting crops by mechanical harvesters. Central and State Pollution Control
Boards have been monitoring the ambient air quality for certain Indian cities for the
last two decades. Monitoring of ambient air quality in rural areas is very sporadic
and purpose specific. Given the severity of the problem, the Punjab Pollution
Control Board (PPCB) conducted air pollution monitoring in three villages of
Patiala districts, namely Dhanauri, Simro, and Ajnoda Kalan during November 1–3,
2006. Patiala is one of the agriculturally leading districts of Punjab which is rich in
crops like rice and wheat. When monitoring was done in these designated villages,
it was ensured that some burning of rice straw was happening in the fields of these
villages. Monitoring stations for the sites were planned keeping in view the
metrological conditions and environmental settings in terms of habited and
non-habited areas and following parameters were monitored: metrological parameters (temperature, humidity, wind speed, and wind direction), particulate matters
Economic Impact of Air Pollution from Agricultural …
299
improving the air quality to WHO standards. Using a similar model, Murty et al.
(2003) observed that a representative household gains about INR 2086 and INR 950
per annum due to reduced morbidity from reduction of air pollution to the safe level
in Delhi and Kolkata, respectively. Similarly, Gupta (2008) estimates aggregate
benefits of the magnitude of INR 225 million per year reducing air pollution to the
safe level for the city of Kanpur, India. Note that these studies are restricted to
measure the monetary value of reducing urban air pollution to the safe level since
air pollution has been considered mainly the problem of urban areas. In the present
study, we use a similar consumer choice model to get the monetary estimates of
reduced air pollution level to the safe level for the rural Punjab.
We use data of 625 individuals collected from a household level survey conducted in three villages, namely Dhanauri, Ajnoda Kalan, and Simro of Patiala
district of Punjab for 150 households. To get the monetary values we estimate two
equations: one with mitigation expenditure and the other with workdays lost as
dependent variables. Tobit and Poisson models are found to be suitable for estimating mitigation expenditure and workdays lost equations, respectively. We find
that total annual welfare loss in terms of health damages due to air pollution caused
by the burning of rice straw in rural Punjab amounts to INR 76 millions.
The paper is organized as follows: Sect. 2 presents the ambient air quality levels
in the study villages during the period when harvesting of rice takes place.
Section 3 gives details of the design of the household survey and analyzes the
households’ behavior. Section 4 describes the theoretical model and estimation
strategy. The results are discussed in Sect. 5, while last section concludes the paper.
2 Ambient Air Quality Level in Study Area
In Punjab, it is common practice to openly burn agricultural residues in fields after
harvesting crops by mechanical harvesters. Central and State Pollution Control
Boards have been monitoring the ambient air quality for certain Indian cities for the
last two decades. Monitoring of ambient air quality in rural areas is very sporadic
and purpose specific. Given the severity of the problem, the Punjab Pollution
Control Board (PPCB) conducted air pollution monitoring in three villages of
Patiala districts, namely Dhanauri, Simro, and Ajnoda Kalan during November 1–3,
2006. Patiala is one of the agriculturally leading districts of Punjab which is rich in
crops like rice and wheat. When monitoring was done in these designated villages,
it was ensured that some burning of rice straw was happening in the fields of these
villages. Monitoring stations for the sites were planned keeping in view the
metrological conditions and environmental settings in terms of habited and
non-habited areas and following parameters were monitored: metrological parameters (temperature, humidity, wind speed, and wind direction), particulate matters
Economic Impact of Air Pollution from Agricultural …
299