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The Willingness to Pay for Environmental Protection: Are Developing Economies Different?

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  • Dorsch, Michael
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    Abstract

    This paper explores the micro-foundations of public policy over environmental protection in developing economies by examining individual-level preferences for economically costly pollution abatement. The paper empirically investigates individuals' marginal willingness to pay (MWTP) for stronger environmental protection, analyzing nearly 24,000 survey responses, from 24 developing economies, to environmental questions from the 2005-2008 wave of the World Values Survey. I analyze the probability that an individual states she is WTP for further environmental protection depending on her individual-level characteristics and her country's characteristics. The main results to emerge from the analysis include: (i) perceived environmental problems that are local do not determine MWTP, where as perceived problems that are global do, (ii) self-identification as a world citizen is the strongest determinant of demand for greater environmental protection, indicating that motivation to contribute to a global public good is not a strictly post-material notion, and (iii) the primary determinants of MWTP are not qualitatively different from those among respondents in advanced economies. The results pose a challenge to the objective problems, subjective values response to the critique of the post-materialism hypothesis. It appears that the WTP for environmental protection in developing economies follows from subjective values that are universal, rather than from objective problems. --

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    Bibliographic Info

    Paper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Berlin 2011 with number 24.

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    Date of creation: 2011
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    Handle: RePEc:zbw:gdec11:24

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    Keywords: Environmental protection policy; Political preferences; Global public goods; World Values Survey; Developing economies;

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    1. Brian R. Copeland & M. Scott Taylor, 2003. "Trade, Growth and the Environment," NBER Working Papers 9823, National Bureau of Economic Research, Inc.
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    3. Stern, David I., 2004. "The Rise and Fall of the Environmental Kuznets Curve," World Development, Elsevier, vol. 32(8), pages 1419-1439, August.
    4. Israel Debra & Levinson Arik, 2004. "Willingness to Pay for Environmental Quality: Testable Empirical Implications of the Growth and Environment Literature," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-31, February.
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    8. Vatn, Arild, 2005. "Rationality, institutions and environmental policy," Ecological Economics, Elsevier, vol. 55(2), pages 203-217, November.
    9. Susmita Dasgupta & Benoit Laplante & Hua Wang & David Wheeler, 2002. "Confronting the Environmental Kuznets Curve," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 147-168, Winter.
    10. Tjernström, E. & Tietenberg, T., 2008. "Do differences in attitudes explain differences in national climate change policies?," Ecological Economics, Elsevier, vol. 65(2), pages 315-324, April.
    11. Bornstein, Nicholas & Lanz, Bruno, 2008. "Voting on the environment: Price or ideology? Evidence from Swiss referendums," Ecological Economics, Elsevier, vol. 67(3), pages 430-440, October.
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