Book Description

The essays in this dissertation explore different environmental and public policy issues relevant to developing countries. Essay I examines household-level survey responses to the question "How willing would you be to pay somewhat higher taxes to the government if you knew the money would be spent to protect the environment and prevent land, water and air pollution?" Specifically, for twelve developing and three developed countries included in the survey, the empirical relationships among willingness to pay for environmental quality, relative household income and national income are investigated. The results indicate that when the effects of household and national income are combined, households with below-average income in low-income countries are less willing to pay for environmental protection than those with above-average income in high-income countries. Furthermore, willingness to pay for environmental protection increases more significantly with relative household income than with national income. Essay II uses data from urban Bolivia to study the determinants of household fuel choice, an important link between deforestation and indoor air pollution in developing countries. In particular, the effects of fixed fuel costs, income growth, and female earned income on household fuel choice are examined. The results imply that reduction in firewood use in developing countries is not likely to occur simply as the result of income growth. The essay discusses possible policy implications based on the results that fixed fuel costs appear to be a deterrent to switching to a cleaner fuel and households with female earned income seem less likely to use firewood than other households. Essay III analyzes the equity implications of the elimination of fuel subsidies in the 1985 Bolivian economic reforms. An analysis of the direct static burden shows that while the elimination of gasoline subsidies was progressively distributed, the elimination of LPG and kerosene subsidies was regressive. Overall, the impact was close to proportional. However, including the indirect effect of urban transportation fare increases adds to the regressivity of the subsidy removal, while including the partial equilibrium effects implies a more progressive burden.