Air pollution is one of the major environmental health hazards responsible for illness and deaths worldwide. Among the sources of air pollution, particulate matter whose diameter is less than 2.5 micron(PM2.5) has the highest effect on health condition. The municipality of Seoul has made various efforts to mitigate the effects of particulate matter. In particular, Ten Measures for Fine Particles were established after an open forum held in June 2017.

Since the management of fine particles would command a huge budget, a legitimate validation through the assessment of socioeconomic benefits is required.

Moreover, there’s a need for an economic analysis on matters related to fine particles in order to cooperate with other municipalities and neighboring countries such as China. This study aims to evaluate the socioeconomic benefit of the management policy of Seoul in regard to airborne particulate matter.

This study estimates the willingness to pay of the management policy of Seoul on airborne particulate matter using the contingent valuation method. The annual willingness to pay was estimated to be 138,107 Korean won per household in Seoul(95% confidence interval of 125,376 to 150,839 won). The total benefit of the management policy of Seoul was estimated to be 540.7 billion Korean won(95% confidence interval of 490.8 billion to 590.5 billion Korean won).

Applying a computable general equilibrium model, the maximum annual benefit of the management policy of particulate matter in Seoul is estimated to be about 26.6 billion Korean won. Annual health benefit of the management policy of particulate matter in Seoul is estimated to be about 413.9 billion Korean won for the next 5 years.

The budget used for airborne particulate matter management in Seoul averaged 160 billion Korean won annually. A simple comparison shows that the benefit of the management of airborne particulate matter in Seoul on Seoul’s citizens would yield 3~4 times more than the incurred expense.

The results of this study are an important basis for the establishment and administration of the management policies on airborne particulate matter in Seoul. For an effective administration of the management policies, additional economic analyses are necessary to study the economic cost of the management policy and the marginal abatement cost of airborne particulate matter.