5.1 Welfare Loss
The welfare loss in terms of health damage due to increase in the concentration of
particulate matters from rice straw burning in the ambient environment can be
estimated in terms of increase in the medical expenditure on mitigating activities
and the opportunity cost of workdays lost and are presented in Table 7.
5.2 Increase in Medical Expenditure
To get the estimates of welfare loss in terms of increased medical expenditure we
need to obtain the marginal effects. The marginal effects in the case of Tobit
estimation could be computed by taking partial derivatives of mitigating expenditure equation with respect to PM 10 and multiplying it by the probability of the
dependent variable taking the nonzero values. If the ambient PM 10 level is reduced
from the level observed during the harvesting period of rice in rural Punjab to the
safe level (i.e., a reduction of 207 µg/m
3 since the safe level defined under NAAQS
is 100 µg/m
3 for the 24 h average), the estimated reduction in medical expenditure
turns out to be INR 2.17 for the months of October and November for a representative person.
Total rural population projected for October 2008 based on Census 2001 is 1083
thousand and 16,839 thousand for the district of Patiala and the state of Punjab,
respectively. Extrapolating this welfare loss for the entire rural population of Patiala
and Punjab, it is estimated as INR 2.35 million and INR 36.52 million,
respectively.
5.3 Opportunity Cost of Increase in Workdays Lost
To get the marginal effects of reduction in PM 10 level on workdays lost, we differentiated partially the reduced form equation of workdays lost with respect to
PM 10 . The Poisson estimates show that one µg/m
3 increase in PM 10 results in a
marginal loss of 0.0,000,946 days for a representative individual in these two
Table 7 Welfare loss due to increased air pollution in Rural Punjab
Representative
individual (INR)
Rural Patiala district
(millions INR)
Rural Punjab
(millions INR)
Medical expenditure
2.17
2.35
36.52
Opportunity cost of
workdays lost
2.35
2.54
39.57
Total welfare loss
4.52
4.89
76.09
310
S. Kumar and P. Kumar
The welfare loss in terms of health damage due to increase in the concentration of
particulate matters from rice straw burning in the ambient environment can be
estimated in terms of increase in the medical expenditure on mitigating activities
and the opportunity cost of workdays lost and are presented in Table 7.
5.2 Increase in Medical Expenditure
To get the estimates of welfare loss in terms of increased medical expenditure we
need to obtain the marginal effects. The marginal effects in the case of Tobit
estimation could be computed by taking partial derivatives of mitigating expenditure equation with respect to PM 10 and multiplying it by the probability of the
dependent variable taking the nonzero values. If the ambient PM 10 level is reduced
from the level observed during the harvesting period of rice in rural Punjab to the
safe level (i.e., a reduction of 207 µg/m
3 since the safe level defined under NAAQS
is 100 µg/m
3 for the 24 h average), the estimated reduction in medical expenditure
turns out to be INR 2.17 for the months of October and November for a representative person.
Total rural population projected for October 2008 based on Census 2001 is 1083
thousand and 16,839 thousand for the district of Patiala and the state of Punjab,
respectively. Extrapolating this welfare loss for the entire rural population of Patiala
and Punjab, it is estimated as INR 2.35 million and INR 36.52 million,
respectively.
5.3 Opportunity Cost of Increase in Workdays Lost
To get the marginal effects of reduction in PM 10 level on workdays lost, we differentiated partially the reduced form equation of workdays lost with respect to
PM 10 . The Poisson estimates show that one µg/m
3 increase in PM 10 results in a
marginal loss of 0.0,000,946 days for a representative individual in these two
Table 7 Welfare loss due to increased air pollution in Rural Punjab
Representative
individual (INR)
Rural Patiala district
(millions INR)
Rural Punjab
(millions INR)
Medical expenditure
2.17
2.35
36.52
Opportunity cost of
workdays lost
2.35
2.54
39.57
Total welfare loss
4.52
4.89
76.09
310
S. Kumar and P. Kumar