Preferences For Environmental Quality Research Articles

Cleaner waters and urbanization

The Clean Water Act (CWA) addresses nonpoint source pollution primarily by funding public works projects. Our study evaluates changes in rural watersheds before and after CWA projects are implemented, compared to watersheds without funding. We find that projects significantly reduce water pollution, with corresponding increases in human population and residential construction. Using housing values, we estimate that economic benefits exceed government costs by at least fourfold. Over half of this benefit is attributable to new housing. Our findings show that pollution can impede urbanization, suggesting more broadly that residential development is an important mechanism of revealed preference for environmental quality.

Fish or steel? New evidence on the environment-economy trade-off in developing Vietnam

• Conventional thinking on the trade-off between economic growth and environmental protection provides an important but limited understanding of the way individuals in developing countries weigh development and environmental considerations; the environment is far more important to their calculus than previously understood. • Unique public opinion data across three years (2017, 2018, 2019) with nationally representative samples of the Vietnamese population is used to model how environmental factors affect individuals’ investment policy preferences when there is a potential trade-off. • In all three years, a conjoint survey experiment identifies multi-dimensional policy preferences and provides shielding, so responsents can answer honestly. Citizens do not blindly prioritize economic goals over environmental quality. Their preferences are most strongly driven by the perceived potential environmental consequences of the investment. Specifically, the larger the potential environmental costs, the less likely respondents were to support the business’ investment license application. While individuals are tolerant of some environmental damage in exchange for jobs or other economic benefits, there is a clear threshold beyond which people are unwilling to tolerate greater environmental costs regardless of the size of economic benefits. This preference for environmental quality remains consistent across different demographic groups and subnational locations. Trade and investment have contributed to the improvement of living standards in developing countries, but have also put severe pressure on natural environments. How do citizens in low-income countries manage this trade-off between economic growth and environmental protection? Using a discrete choice experiment conducted as part of three large, face-to-face nationally representative surveys of Vetnamese citizens (N=>12,500 respondents per wave), we find that prospective economic benefits increase public support for investment projects, whereas potential environmental harm resulting from investment decreases the public appetite for them. When economic and environmental factors are considered jointly, our results point to the existence of an environmental risk threshold. Environmental costs beyond that threshold lead citizens to reject investment projects, even when they generate considerable economic benefits. Our results challenge the theory that individuals in low-income countries prioritize development over environmental protection, and have implications for political leaders in designing their countries’ future investment policies.

Port Environmental Quality or Economic Growth? Their Relevance and Government Preference in Developing Countries

In the past few years, the marine ecosystem has been a cheap resource in developing countries in the process of pursuing short-term vested interests. Therefore, high economic development of the developing countries is at a huge environmental cost. Nowadays, environmental protection is becoming a global concern. In this background, the government of the developing countries begins to formulate reasonable marine economic and environmental policies to find a balance between rapid economic development and marine environmental protection. In this contribution, a dynamic stochastic general equilibrium model (DSGE) is constructed with the environmental constraints, and Bayesian estimation is used to calibrate the main parameters. Next, the model is employed to analyze the effects of government and consumer environmental preferences on macroeconomic variables, environmental quality, and consumer and government utility. Results show that the government’s preference for environmental quality is positively related to port environmental quality and negatively related to output, capital stock, and consumption. An enhancement of the environmental quality preference of the target audience can realize balanced development of economic growth and port environmental quality. The findings are conducive to coordinating the relationship between economic development and environmental protection and achieving sustainable development of the port.

Who Cares About Environmental Quality in the MENA Region?

This paper provides new evidence on the preference for environmental quality among youth in the Middle East and North Africa (MENA) region. Our paper aims to provide insights into the relationship between youth outlooks and characteristics and environmental awareness. We use a unique and nationally representative micro-level dataset extracted from the SAHWA Youth Survey (Barcelona Centre for International Studies (CIDOB), Barcelona, 2016) conducted in five major MENA countries: Algeria, Egypt, Lebanon, Morocco, and Tunisia. The empirical investigation utilizes the ordered probit model to accommodate the ordinal nature of the dependent variable that measures environmental awareness. Our findings indicate that the preference for a better environmental quality increases with individual income, by being female, and with the lack of confidence in government. Moreover, identity factors such as gender equality, the unimportance of traditions and perceiving oneself as a national citizen have a positive effect on environmental awareness. These findings signal a number of potential policy implications. First, they point to the importance of economic growth and modernization in the region as a way of increasing environmental awareness in the future. Second, they reveal a genuine demand for the provision of public goods in the presence of weak governmental actions with respect to environmental quality. Third, the fact that females demand more environmental quality than males allows us to forecast a general increase in such awareness as females across the region participate more in the economy, society and politics leading to what we can call ‘female environmental stewardship’.

Trade in trash: A political economy approach

We study how the opportunity to trade in trash might influence the equilibrium outcome when the tax on the externality is determined by a political economy process. In our model, individuals have heterogeneous preferences for environmental quality, and there is a wastage of real resources when funds are transferred from the pressure groups to the politicians. When hard-core environmentalists and capitalists are organized interest groups while moderate environmentalists are not organized, we find that the politically chosen tax on the externality is below the optimal Pigouvian level. The opportunity to export waste in unlimited quantities, but at a price, is not the environmentalists’ panacea and does not eliminate political social tension and suboptimal results.

What if people value nature? Climate change and welfare costs

We introduce temperature shocks and preferences for environmental quality in a real business cycle model with natural resources. Temperature anomalies are transmitted to the business cycles via their negative effects on output and agents’ utility. Our findings suggest that permanent and temporary weather shocks propagation and their welfare implications depend crucially on whether agents value environmental quality. A permanent increase in temperature reduces output with damages reaching up to 1.61% of GDP. Agents who value environmental quality experience a higher temporary welfare gain when facing a negative weather shock, but welfare drops faster as the economy returns to equilibrium. Temperature anomalies amplify the (negative) effect of climate change on natural resources use and welfare.

Trade in Trash: A Political Economy Approach

We study how the opportunity to trade in trash might influence the equilibrium outcome when the tax on the externality is determined by a political economy process. In our model, individuals have heterogeneous preferences for environmental quality, and there is a leakage when funds are transferred from the pressure groups to the politicians. When hard-core environmentalists and capitalists are organized interest groups while moderate environmentalists are not organized, we find that the politically chosen tax on the externality is below the optimal Pigouvian level. The opportunity to export waste in unlimited quantities, but at a price, is not the environmentalists’ panacea and does not eliminate political social tension and suboptimal results.

Effects of the preference for environmental quality on the export competition between China and OECD countries

AbstractThis study examines how importers’ preferences for environmentally friendly products influence the effect of China’s export growth on the exports of OECD countries to third markets. The effect of China’s export growth is systematically investigated using the theoretical gravity model, which assumes that importers’ environmental preferences are heterogeneous among countries. A new measure is also proposed to represent importers’ revealed preferences for environmental quality across countries. Panel data consisting of observations for 30 OECD exporting countries and 60 importing countries over the 2000–10 period confirm that the crowding‐out effect of China’s export growth on the exports of OECD countries observed in markets for consumption goods and the dampening effect observed in markets for intermediate goods are becoming weaker as the importer preference for environmental quality becomes stronger.

New highway development in the Netherlands: A residents’ perspective

This study investigates the impacts of new highway development from a residents’ perspective. Data were collected by questionnaire in two residential areas, Son and Uden, both situated along the new A50 highway in the Netherlands. The objectives of this study are: (1) to analyse the extent to which highway development has impacted the residents’ self-reported residential satisfaction through the use of Structural Equation Modeling, and (2) to explore residential self-selection, by comparing characteristics of the original population with those who have relocated into the area during and after highway development using Multinomial Logistic Regression.The results indicate that a small majority of the residents perceived an increase in residential satisfaction due to the highway development. Living in the sampled area in Son (compared to Uden), living on close proximity to the A50 highway, having a low preference for car accessibility, and a strong preference for environmental quality were negatively associated with the change in residential satisfaction, mostly via a negative association with the perceived change in liveability or accessibility. The findings of our second analysis show that residents who had relocated into the area after the highway development have a slightly more ‘highway-oriented’ profile than the original population, i.e. a marginally higher preference for car accessibility and lower preference for environmental quality.The study sheds light on the importance of accounting for the perceptions of the wider residential population and reveals how the impacts of new highway development differ between and within residential areas.

Global environmental standards with heterogeneous polluters

We introduce environmental quality standards into a model of intra-industry trade with heterogeneous polluters. Pollution stems from consumption and pollution intensity declines with product-specific environmental quality. We formally analyze the effects of global environmental standards and three trade-liberalization policies. When consumer preferences for environmental quality are weak (strong) relative to the environmental quality elasticity of production costs, firms discovering dirtier (cleaner) products are more profitable and engage in exporting. More stringent environmental standards or trade liberalization policies enhance per-capita real consumption. The effects of these policies on global pollution and welfare are ambiguous.

Political instability and non-market valuation: Evidence from Croatia

We examine the effect of political instability on willingness to pay estimates (WTP) from nonmarket valuation, using data from a choice experiment implemented in Zagreb, Croatia to value groundwater quality and quantity. To evaluate the sensitivity of preferences for environmental quality to instability, we use the timing of a period of public protest that occurred in the city during the data collection and compare preferences before and during the protest. We find some evidence that WTP is lower in the period of political instability, but the result is sensitive to the specification used.

Green consumerism and pollution control

In this paper, we show that collective action by environmentally aware/green consumers, who derive benefits from consuming environmentally cleaner products, can reduce pollution and improve social welfare in the same manner as pollution taxes or subsidies for reducing pollution can. We construct a model with two competing firms each producing a good of different environmental quality and two types of consumers with high and low preferences for environmental quality and characterize a benchmark equilibrium in which each consumer acts individually and disregards that his decision to buy a good may affect the level of pollution. We then show that, compared to the benchmark equilibrium, collective action by consumers with high preference who take into account the impact of their combined decision to buy a good on pollution will result in an equilibrium with not only lower pollution and higher social welfare, but also higher prices and profits for the firms.

The Value of Statistical Life: Pursuing the Deadliest Catch

Observed tradeoffs between monetary returns and fatality risk identify estimates of the value of a statistical life (VSL), which inform public policy and quantify preferences for environmental quality, health and safety. To date, few investigations have estimated the VSL associated with tradeoffs between returns from natural resource extraction activities and the fatality risks they involve. Understanding these tradeoffs (and the VSL that they imply) may be used to inform resource management policy and safety regulations, as well as our general understanding of the value of life. By modeling a commercial fishing captain's choice to fish or not, conditional on the observed risk, this research investigates these topics from data on the Alaskan red king crab fishery. Using weather conditions and policy variables as instruments, our estimates of the VSL range from $4.6M to $4.9M (depending on the modeling assumption) and are robust to the incorporation of heterogeneous preferences.

Are Democrats Greener than Republicans? The Case of California Air Qua

When it comes to environmental quality preferences, it is popularly believed that Democrats (and more generally, liberals) are “green” while Republicans” (conservatives) are “brown”. Does empirical evidence support this popular belief? We test the hypothesis that regional political identification leads to differences in concentration outcomes for several measures of California air pollution indicators, including CO, NO2, SO2, O3, PM10, and PM2.5 concentrations. We employ two alternative identification strategies on county-level cluster and year panel data that include proxy variables for political party preferences of the local populace, as well as controlling for the political party affiliations at the state-level legislative and executive branches. In general, we do not find a consistent and statistically significant relationship between pollution outcomes and political variables for California. The popular belief is empirically supported only for NO2 and O3, but not for any of the other pollutants, and even in these two cases the relationship only holds at the local regulatory level and not at the state policymaking level. At the state level, for most of the pollutants no significant effect of party affiliation is identified, and in the rare cases where such an effect exists, it is either too weak to be conclusive or is even counter to popular belief.

Are Democrats Greener than Republicans? The Case of California Air Quality

When it comes to environmental quality preferences, it is popularly believed that Democrats (and more generally, liberals) are “green” while Republicans” (conservatives) are “brown”. Does empirical evidence support this popular belief? We test the hypothesis that regional political identification leads to differences in concentration outcomes for several measures of California air pollution indicators, including CO, NO2, SO2, O3, PM10, and PM2.5 concentrations. We employ two alternative identification strategies on county-level cluster and year panel data that include proxy variables for political party preferences of the local populace, as well as controlling for the political party affiliations at the state-level legislative and executive branches. In general, we do not find a consistent and statistically significant relationship between pollution outcomes and political variables for California. The popular belief is empirically supported only for NO2 and O3, but not for any of the other pollutants, and even in these two cases the relationship only holds at the local regulatory level and not at the state policymaking level. At the state level, for most of the pollutants no significant effect of party affiliation is identified, and in the rare cases where such an effect exists, it is either too weak to be conclusive or is even counter to popular belief.

Hedonic vs Environmental Quality: Which Policy Can Help in Lowering Pollution Emissions?

In this paper we compare two policy instruments that can be adopted to curb carbon emissions. The first is a conventional pollution tax. The second is an environmental campaign aiming to influence consumers to switch to a green good. We consider two different scenarios. When consumers are characterized by hedonic quality preferences, in this case the pollution tax is more efficient than the campaign. On the contrary, when consumers develop environmental quality preferences, there are cases in which the campaign is preferred. To sum up, while both policy instruments are effective in reducing pollution emissions, their efficiency viewed from a welfare perspective crucially depends on consumers' environmental awareness.

The Dynamics of Environmental Giving in Canada: Evidence of Rising Demand for Environmental Quality?

This study explores environmental giving behaviour over time in Canada and considers whether changes in such behaviour serve as an indication of evolving preferences for environmental quality. The data sets of the 1997 National Survey of Giving, Volunteering and Participating (NSGVP) and the 2007 Canada Survey of Giving, Volunteering and Participating (CSGVP) are analysed using the probit selection and Heckman selection models to study environmental giving behaviour. The results suggest that the demand for environmental quality in Canada may have increased over time and that several economic, socio-demographic and geographic factors influence the likelihood of donating and the amount of the donation expenditure. The findings have implications for public policy.

Signaling in international environmental agreements: the case of early and delayed action

This paper presents a stylized international environmental agreements game with two regions differing in their preference for environmental quality. If side payments are allowed, cooperation can increase the payoffs accruing to both regions. However, cooperation can be impeded by asymmetric information about the regions’ types and only become feasible once a region has credibly revealed its type. We show how in a two-stage game early (delayed) action can act as a credible signal to reveal private information on high (low) benefits. Yet, the cooperative solution with asymmetric information is Pareto-dominated by the outcome with perfect information.

External balance, dynamic efficiency, and the welfare effects of unilateral and multilateral permit policies in interdependent economies

This paper investigates domestic and foreign welfare effects of unilateral and multilateral permit policies in a two-country overlapping generations model with producer carbon emissions. We show that the welfare effects of a more stringent cap on emissions depend on the external balance of the policy implementing country, the dynamic (in)efficiency of the world economy, and the preference for environmental quality. Under dynamic efficiency, the global welfare loss of policy implementation in a net foreign creditor country is lower than of a policy in the net foreign debtor country. Moreover, although the country which has unilaterally implemented a permit policy would gain from a multilateral policy, the associated welfare loss for the other country is larger than that of a unilateral policy abroad.

The Factors Behind CO2 Emission Reduction in Transition Economies

The Central and Eastern European countries significantly reduced their carbon dioxide (CO2) emissions between 1995 and 2003. Was this emission reduction just the fortuitous result of the major economic transformation undergone by countries in the transition? Or is it rather a result of more stringent environmental policy? The objective of the article is to answer this question through a simultaneous equation model of the demand (emissions) and supply (environmental stringency) of pollution. The supply equation takes into account the institutional quality of the country as well as consumer preferences for environmental quality. The results indicate that, all else equal, output growth would have increased industrial CO2 emissions in the Central and Eastern European countries in our sample by 31% between 1995 and 2003, and the composition effect corresponded to an increase of 8.4% of emissions. Nevertheless, the technique effect, induced by more stringent environmental policy, reduced industrial CO2 emissions by 58%, and allowed for a final beneficial result for the environment, i.e., -18% of industrial CO2 emissions in 2003 compared to 1995. Finally, our study confirms the importance of institutional factors in the explanation and further prediction of pollution reduction in transition economies.