Willingness to Pay for Air Quality Improvement in Sofia, Bulgaria

This paper reports a survey study of willingness to pay for air quality improvement in Sofia, Bulgaria. The stochastic payment card approach, which asks respondents the likelihood that she would agree to pay a series of prices, was employed to estimate individuals' willingness-to-pay distributions. The results show that people in Sofia were willing to pay up to about 4.2% of their income for an air quality improvement program. Income elasticity of willingness-to-pay for air quality improvement was about 27%. The traditional, referendum contingent valuation approach was also employed for the purpose of comparison. The empirical results show that the referendum approach produces a much higher estimation of willingness to pay than the stochastic payment card approach.