Willingness to pay for environmental protection in China: Air pollution, perception, and government involvement

Abstract

The deteriorating environment has become an urgent global problem. As developing country, China is no exception. Demand for clean air is increasing in response to health and social problems. We use China's micro household survey data to explore individual residents' willingness to pay for environmental protection (WTP). Results show that air pollution improves WTP. A 100 ​μg/m³ increase in PM2.5 leads to approximately 84.1% WTP on a given day, but local residents are habituated to local pollution. We further study air pollution affects individual perceptions. We discuss the belief that local governments take pollution seriously can promote WTP. In addition, respondents who own smartphones, demonstrate environmental awareness, are happier, and enjoy higher household assets and income are willing to pay more.

Keywords

• Air pollution
• PM2.5
• Willingness to pay
• Perception
• Government emphasis