Private benefits from ambient air pollution reduction policies: Evidence from the household heating stove replacement program in Chile

We estimate the key private benefits from a program to improve ambient air quality during winter in central Chile by replacing inefficient wood-fired home heating stoves with more efficient pellet stoves. We are interested in the private benefits to households, because they represent additional value of the program and likely drive adoption. Combining electronic stove surface temperature and air pollution monitoring with household surveys, we estimate the effects of adoption on household fuel expenditures, indoor temperatures and indoor air pollution concentrations (PM2.5) when the stoves are in use. We also explore heterogeneous effects of the program by income group and energy poverty status. Our results suggest that, after controlling for observable characteristics of individuals and dwellings, users of pellet stoves on average enjoy 14 % lower indoor PM2.5 concentrations during hours in which stoves are in use compared with those who use traditional stoves during the same periods of time. Lower-income and energy-poor households receive much greater than average improvements in indoor air pollution than those with higher-incomes, driving the overall estimate and indicating that the program is progressive in this dimension. The improved heating stove has significantly higher operating costs, however, and we find that these costs are most salient for low-income and energy-poor households.