A Breath of Bad Air - A contingent valuation study

Abstract: Bosnia and Herzegovina has the highest concentration of PM2.5 and the highest death rate related to air pollution in Europe. This study tries to address the issue by the contingent valuation method to elicit citizens’ willingness to mitigate the air pollution in Sarajevo. The monetary valuation predicted that the average citizen living in Canton Sarajevo was willing to pay 4.65 KM/month (≈ 2.30 EUR) through a tax surcharge during a three-year period for a decrease of air pollutants by 20%. Suggestive implications showed that full time employed and retirees were more likely to pay for the mitigation than unemployed, however the probability of not being willing to pay increased with age. Women, landowners and those that believe in rising global temperature were predicted to have a positive causal effect on the willingness to pay, while age had a negative effect. The weaknesses of the statistical predictions occur from the small sample size of 126 individuals, thus much bigger sample is needed. This study provides estimates primarily as an indication of citizens’ approval on improving the air quality in Sarajevo