Are land values related to ambient air pollution levels? Hedonic evidence from Mexico City

This article investigates whether residents of Mexico City value air quality. Our results suggest that air quality improvement in PM 10 is equivalent to a marginal willingness to pay (MWTP) of US$440.31 per property for the period 2006–2013. The corresponding MWTP for PM 2.5 is US$880.63, for O 3 is US$623.78, and for SO 2 is as much as US$2091.50. These estimates are considerably larger in magnitude compared to the few other studies in similar settings. As a percentage of annual household income, these represent 2.44 per cent for PM 10 , 4.88 per cent for PM 2.5 , 3.46 per cent for O 3 and 11.59 per cent for SO 2 . Our estimates of land value–pollution elasticities for PM 10 (−0.26 and − 0.58) are within range of hedonic estimates for total suspended particulate matter in US cities around the 1970s. The corresponding elasticities range from − 0.55 to − 0.84 for PM 2.5 , from − 0.06 to − 0.49 for O 3 and from − 0.11 to − 0.34 for SO 2 .