Measuring the value of airborne particulate matter reduction in Seoul

Airborne suspended particles, also generally referred to as fine dust, are one of Korea's most serious environmental and economic concerns. This paper estimates the perceived cost of damage from fine dust in the housing market in Seoul. To do this, we collected data on approximately 120,000 apartment transactions in 2016 and created variables explaining the apartment price, including the concentration of fine dust at the district level. Our results indicate that price premiums exist for apartments in areas with fine dust concentration decrease. This finding reflects the willingness to pay for reductions in fine dust levels, which can be viewed as the monetary value of the benefit with respect to a cost-benefit analysis for fine dust reduction policies. This finding might also provide valuable information when making decisions on the degree of effort that our society must make, and the resources needed, to mitigate this problem.