The Implicit Price of PM2.5 by Using Hedonic Model : The Case of Incheon and Gyunggido

Recently, unlike other air pollutants, the level of fine particle matter (PM2.5) levels have been increased radically. However, there has been few studies to estimate the value of PM2.5. Therefore, this study estimated the value of PM2.5 reduction by using Hedonic model and limited the regional scope to Gyunggido and Incheon. Futhermore, this study employed least median of squares which is robust to outlier. According to estimation results, the educational condition, access to convenience facilities, environmental condition and air quality influence the housing price. Furthermore, the increase of PM2.5 emission per 1 ton makes the housing price decreased by 2,040 won per 1㎡. This elasticity can be interpreted as the implicit price of PM2.5 per 1 ton. This study is expected to provide insight for both research and policy-making.