The main purpose of this paper is to estimate environmental preference of advanced countries for water and air pollution. In doing so, we introduce home production. That is, we assume that pollution has not only negative effect on utility but also positive effect on production, Thus if the former is greater that the latter effect, the total effect of pollution is negative. In this paper, we investigated this effect of advanced countries by using GMM estimator. The main finding is that in case of air pollution. This effect is negative. This implies that in case of air pollution, the disutility effect is greater that productivity effect.