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Spillover or crowding out? The effects of environmental regulation on residents’ willingness to pay for environmental protection

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  • Ling-Yun He

    (China Agricultural University
    JiNan University
    Nanjing University of Information Science and Technology)

  • Hong-Zhen Zhang

    (China Agricultural University)

Abstract

Existing researches about environment regulation mainly focus on its effect on enterprises’ production decision-making behavior but neglects the effect on the individual and household behavior. Based on the micro survey data from the Chinese General Social Survey 2010 and corresponding city-level macroeconomic data, this paper investigates the effect of environmental regulations on residents’ willingness to pay (WTP) for protecting the environment. We find that environmental regulation has a significantly positive effect on residents’ WTP, especially where residents are at higher income levels, pollution levels, and government trust levels. The heterogeneous test shows that boosting the government’s credibility in environmental governance has become the key to improve the environmental preferences of the entire society. Finally, we show that reducing the expected cost and expected benefit of environmental protection is the main channel through which environmental regulation affected the residents’ WTP.

Suggested Citation

  • Ling-Yun He & Hong-Zhen Zhang, 2021. "Spillover or crowding out? The effects of environmental regulation on residents’ willingness to pay for environmental protection," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 105(1), pages 611-630, January.
    • Handle: RePEc:spr:nathaz:v:105:y:2021:i:1:d:10.1007_s11069-020-04326-9
    DOI: 10.1007/s11069-020-04326-9
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    4. Uttam Paudel & Shiva Raj Adhikari & Krishna Prasad Pant, 2023. "Willingness to Pay for Environmental Quality Improvement Programs and Its Determinants: Empirical Analysis in Western Nepal," Sustainability, MDPI, vol. 15(3), pages 1-20, January.

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