SRI LANKAN  JOURNAL OF  AGRICULTURAL ECONOMICS

Volume 14,15.  Number 1.  2012,2013


Health Benefits and Industrial Air Pollution: A Comparison between People’s Willingness to Accept and the Opportunity Cost of Health Risk

Wasantha Athukorala  *

ABSTRACT

The disparity between willingness to accept (WTA) health risks and actual health risks arising from environmental pollution has not been demonstrated well in the literature. This study provides evidence on WTA for bearing existing health risks arising from environmental pollution caused by the Limestone Industry in Sri Lanka. It compares mean WTA with monthly
average health expenditure as well as the opportunity cost of health risk. The study finds that the average monthly health expenditure, averting expenditure and lost earning per person were Rs. 168, Rs. 85 and Rs. 262 respectively.

Accordingly, opportunity cost of the health damage was Rs. 515 while mean willingness to accept was Rs. 792 per person. Results clearly show that mean WTA estimates tends to overestimate the true cost. The study also summarizes reasons for the disparity and then discusses some of the key implications of the analysis.


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Author is Lecturer,  Department of Economics and Statistics, Faculty of Arts, University of
Peradeniya, Sri Lanka.

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Athukorala  2013 , Sri Lankan Journal of Agricultural Economics. Volume 13,14 (1). Pp. 43  - 58 

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