The intangible costs of haze in Singapore and Malaysia : a willingness to pay model

• Main Authors: Chan, Wee Shung, Loh, Weijin, Wan, Wai Leong
• Other Authors: Chia Wai Mun
• Format: Final Year Project
• Language: English
• Published: 2017
• Subjects: DRNTU::Social sciences
• Online Access: http://hdl.handle.net/10356/70031
• Institution: Nanyang Technological University

Indonesia’s transboundary haze phenomenon has garnered much attention in the recent decade for its detrimental impact. Previous studies have focused on assessing the monetary loss on economic activities and its impact to health. However, the intangible psychological impact accompanying this phenomenon has yet to be explored. This paper presents an analysis on the intangible cost incurred during the 2015 haze episode in Singapore and Malaysia. Using the widely adopted contingent valuation model, empirical study is conducted to estimate the willingness to pay (WTP) on intangible cost of haze. This study estimates an aggregate intangible cost of SGD 360.88 million and RM 652.69 million in Singapore and Malaysia respectively. Subsequently, this paper identifies the public concerns on issues relating to the intangible cost in both countries. Overall, issues associated with the negative impacts on health, climate and business activities as well as the disruption of social activities were generally acknowledged as intangible costs of haze. In addition, the socio-economic profile of an individual who has a high WTP to avoid the intangible cost of haze is identified in this study. The individual is likely to have higher risk exposure to haze-related illness, spends many hours in outdoor areas and have a risk-averse attitude. Following this paper’s holistic assessment of the intangible costs, it is possible for future research to conduct comprehensive cost-benefit analysis to aid in the formulation of future policies.