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Analysis of the Factors Influencing Willingness to Pay and Payout Level for Ecological Environment Improvement of the Ganjiang River Basin

Kai Xiong (), Fanbin Kong (), Ning Zhang (), Ni Lei () and Chuanwang Sun
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Kai Xiong: Institute of Ecological Economics, Jiangxi University of Finance and Economics, Nanchang 330013, China
Fanbin Kong: Institute of Ecological Economics, Jiangxi University of Finance and Economics, Nanchang 330013, China
Ni Lei: School of Public Administration, Faculty of Economics and Management, East China Normal University, Shanghai 200062, China

Sustainability, 2018, vol. 10, issue 7, 1-17

Abstract: China has continuously stepped up its efforts to protect the ecological environment of the Ganjiang River Basin. The government has played a leading role, but the residents, who have also played an important role in this issue, are often overlooked. Consequently, it is necessary and urgent to study the willingness of the residents, who are the direct stakeholders, to pay for the protection of the ecological environment of the Ganjiang River Basin. Based on a survey of 773 households, this study examines the downstream residents’ willingness to pay (WTP) and their payout levels. Using the payment card (PC) contingent valuation method (CVM), we measure the payment probability of the downstream residents and the amount they are willing to pay. Additionally, Heckman’s two-stage model is adopted for exploring the influencing factors of the surveyed residents’ WTP and payout levels and avoiding the possible presence of sample selection bias. The results showed that 75.03% of the surveyed residents are willing to pay for ecological compensation in the Ganjiang River Basin. The downstream residents are willing to pay an annual average amount of about $47.62/household for ecological compensation. The factors that significantly influence their WTP include the educational background, work type, residential location, and water quality and quantity. In the case of payout levels, the influencing factors include the education background, work type, household annual disposable income, and water quality and quantity. In addition, the factor of value recognition is marginal and significantly related to WTP and payout levels. The results of this empirical study have important policy implications and recommendations that the government should intensify its propaganda about the ecological value, increase investment in education, and establish a variety of ecological compensation payments, in order to protect and improve the ecological environment of the Ganjiang River Basin.

Keywords: ganjiang river basin; ecological compensation; willingness to pay; influencing factors; Heckman’s two-stage model (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
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