How environmental policies affect personal willingness to pay for environmental protection: an investigation of interpretative and resource effects

With environmental problems have become a global concern, large number of environmental policies have been enacted worldwide. Though improving personal willingness to pay (WTP) for environmental protection is key objective of environmental policies, existing literature overlook the micro relevance of environmental policies and lacks the exploration of the relationship between environmental policies and WTP and related mechanisms. To fill the research gap, this study took China’s energy-related environmental policies as a typical example, drew wisdom from policy feedback theory to develop a theoretical framework, and used CGSS 2018 data to analyse interpretative effect and resource effect of related policies on WTP. The empirical results show that policies have a positive impact on WTP of approximately ¥1.19, but this impact comes with complex mechanisms. On the one hand, policies increase energy knowledge, thus improving WTP (interpretative effect); on the other hand, policies alleviate energy poverty, which further reduces WTP (resource effect). The positive interpretative effect is larger than negative resource effect. The robustness of findings is confirmed by adjusting the samples, measurements and models. This study is among the first to examine the influence mechanism of environmental policies on personal WTP through the lenses of interpretative and resource effects and reveals an unexpected consequence of policies. Accordingly, this study provides policy recommendations for environmental governance.