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

Ling-Yun He and Hong-Zhen Zhang
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Hong-Zhen Zhang: China Agricultural University

Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, 2021, vol. 105, issue 1, No 29, 630 pages

Abstract: 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.

Keywords: Environmental regulation; Willingness to pay; Environmental awareness; Spillover effect (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s11069-020-04326-9

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