Analysis on Willingness to Pay for environmental services and its impacts in Jinhua River

Abstract

Natural environments provide a wide variety of goods and services to a country's population. Many of these goods and services are provided indirectly — that is, there is no explicit link between the service providers and the users of the services. This is usually due to the spatial separation between the environmental services providers and the users of the same environmental service.As a result, Ecosystem managers have little economic incentive to improve environmental management, the environment is often degraded in many places and the environmental services are not enough for users. The survey of Willingness To Pay (WTP) and the analysis of influencing factors are of great help to the establishement of ecological compensation mechnism. Contingent Valuation Method (CVM) is adopted to evaluate WTP of local residents along Jinhua River Basin for environmental services and Ordered Probit Model & Binary Probit Model is used to analyze the influencing factors of the maximum WTP and the payment mode. The results indicate that, among those residents, 78.4% residents have the WTP, with average maximum WTP of RMB 24.87 per household/month and RMB 298.46 per household/year; maximum WTP has a positive correlation with education level and income; importance of environment to economy shows little significant influence on maximum WTP; age and maximum WTP follow quadratic function relation; the importance of environment to economy and education level lead to the larger probability to pay the ecological compensation taxes; gender, age, whether suffered from pollution disaster or not and maximum WTP have no obvious influence on residents' choice of payment modes.