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http://dx.doi.org/10.15266/KEREA.2021.30.3.365

An Analysis of the Correspondence between Environmental Damage and the Subsidy in the Vicinity of a Landfill in the Seoul Methropolitan Area  

Kang, Heechan (Department of Economics of Incheon National Univerisity)
Publication Information
Environmental and Resource Economics Review / v.30, no.3, 2021 , pp. 365-393 More about this Journal
Abstract
Using the Choice Experiment Method, this paper identified whether subsidy to the household around landfil in Seoul metropolitan area is being provided corresponding to the scale of the environmental damage. Since 2001, the subsidy program has been operating for nearly 20 years to compensate for various environmental damage (foul odor, noise, air pollution, water pollution, etc.) from landfill site in the metropolitan area, but it is not clear on what ground the subsidy is allocated. This paper estimated the marginal WTP by attribute (odor, noise, air pollution, and water pollution) based on mixed logit model and compared them with current subsidy level per household in each town. As a result of the comparison, it was found that the subsidy for each town was not allocated in proportion to the amount of the marginal WTP for each household in the corresponding town. In addition, this paper constructs a level-by-level scenario for environmental improvement attributes and compares economic benefits and current subsidy levels. As a result, the current subsidy level is insufficient compared to the level at which environmental damage is completely eliminated, but excessive subsidy is allocated compared to partial improvement levels.
Keywords
Landfill; Subsidy; Disamenity; Choice experiment method; Mixed logit model; Willingness to pay;
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