Quantifying the Monetary Value of Environmental Pollution : A Life Satisfaction Approach

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  • Economic and Political Weekly Vol.60; No.32 - 09 Aug. 2025 pp. 123-131
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Summary: The monetary value of environmental pollution, particularly air pollution and water pollution, is evaluated. The findings reveal that the levels of air pollution depicted by nitrogen dioxide, and water pollution depicted by biochemical oxygen demand, have a significant adverse impact on the life satisfaction of individuals in India. Specifically, in the case of nitrogen dioxide, people are willing to accept 21%–33% of their annual income in exchange for exposure to air pollution. In contrast, for improved water quality, individuals are willing to accept 11%–21% of their annual income.
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The monetary value of environmental pollution, particularly air pollution and water pollution, is evaluated. The findings reveal that the levels of air pollution depicted by nitrogen dioxide, and water pollution depicted by biochemical oxygen demand, have a significant adverse impact on the life satisfaction of individuals in India. Specifically, in the case of nitrogen dioxide, people are willing to accept 21%–33% of their annual income in exchange for exposure to air pollution. In contrast, for improved water quality, individuals are willing to accept 11%–21% of their annual income.

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