Valuing air quality improvements from cleaner public transportation in Metro Manila

Date of Award


Document Type


Degree Name

Doctor of Philosophy in Economics (Regular Track)



First Advisor

Rosalina Palanca-Tan, Ph.D.


  • This study used the contingent valuation method to measure the benefits of improved air quality in Metro Manila through the adoption of cleaner public transportation. To address the problem of air pollution in Metro Manila, the study proposed a jeepney buy-back program through which the current fleet of diesel jeepneys would be replaced with zero-emission electric vehicles. A single-bound dichotomous choice contingent valuation approach using the referendum format was used to estimate willingness to pay (WTP) from a survey of 1,000 households. The study arrived at WTP estimates for the proposed program ranging from PHP173.10 (USD3.85) to PHP259.75 (USD5.77) per month. Income elasticity of WTP was estimated at 0.49, indicating that low-income households were willing to pay a larger portion of their incomes than high-income households for improvements in Metro Manila air quality. The results of a simple cost-benefit analysis showed that the program would yield a net social cost of PHP 3.45 billion, which implied that Metro Manila could not afford the proposed program at this time. Nonetheless, aggregate benefits from improved air quality estimated at PHP 5.43 billion per year should encourage policymakers to initiate alternative projects. For comparison, a benefits transfer of cost-of-illness estimates from a U.S. study by McCubbin and Delucchi(1999) on motor-vehicle pollution was performed, yielding total costs avoided amounting to PHP3.15 billion for the same improvement in air quality. The study also investigated the impact of using secret ballots for eliciting WTP responses to minimize yea-saying behavior and reduce social desirability bias. WTP estimates from data gathered using the secret ballot technique were significantly lower than estimates from data gathered using the conventional face-to-face method.


The E2.F775 2012