Can payment vehicle influence public willingness to pay for environmental pollution control? Evidence from the CVM survey and PSM method of China

Abstract

Encouraging the public participation in the pollution control is one of the priorities of many governments. The payment vehicle can provide a context for the public, when they are evaluating their intention to pay for environmental protection. How the payment vehicle affects the public willingness to pay (WTP), and which payment mode is more incentive are discussed in this paper. An open-ended face-to-face CVM survey across 10 provinces in China provides a data support for this study. Heckman selection model is adopted to deal with the selection bias and Propensity Score Matching (PSM) method is used to the WTP valuation by alleviating endogenous problem. This study finds that there is a significant relationship between the payment vehicles and the public WTP for environmental pollution control. The evidence shows that the WTP of mandatory payment is 12.49 RMB/month convincingly higher than that of voluntary payment. A further study based on the Chinese General Social Survey (CGSS) also proves evidence that there are differences in two kinds of mandatory payment vehicles. Finally, some practical policy recommendations are put forward to actively guide the public participation in the pollution control.