Do hazardous levels of air pollution in developing countries reflect low demand for air quality or imperfect information about its benefits? This paper implements an experiment to estimate the demand for clean air in a low-income country and tests for several possible market failures in information that may affect it. Combining randomized price variation for low-cost pollution masks with day-to-day variation in ambient air quality, we estimate an average marginal willingness-to-pay (MWTP) for an annual 10 unit reduction in PM2.5 of $1.14 (USD) among low-income residents of Delhi, India. This estimate is low in global terms, but increases more than five times for respondents who are treated with a description of the health effects of air pollution prior to demand elicitation. These findings suggest limited demand for clean air may partly reflect limited information about its benefits.
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