A Contingent Valuation Study Comparing Public Willingness to Pay for Climate Change Mitigation in China and the United
Mentor 1
Eric Jamelske
Mentor 2
James Boulter
Mentor 3
Won Jang
Location
Union Wisconsin Room
Start Date
24-4-2015 2:30 PM
End Date
24-4-2015 3:45 PM
Description
Climate change could be the single most important issue of our time. As the world’s two largest greenhouse gas (GHG) polluters, the United States and China are of particular interest in the discussion on climate change. Because the costs/benefits of taking climate action arise in a non-market environmental setting, we employ a contingent valuation method to estimate public willingness-to-pay (WTP) as a measure of supporting policy action. Specifically, this study employs a double-bounded dichotomous choice (DBDC) framework to elicit WTP values from citizens in both China and the United States. The data used here are from surveys conducted in the United States (n=3,641) and China (n=3,717) between September and November 2013. The DBDC model consists of two WTP questions both of which can be answered yes or no. Respondents were informed that most policies to address climate change involve putting a price on GHG emissions that will likely increase household expenditures on heating, electricity, transportation, food and other goods and services. They were then asked if they would support a policy to address climate change if it increased their average monthly household expenditures by one of three initial bid amounts. Responses of no to that bid amount are followed up with a lower amount, while yes responses are followed up with a higher amount. As a validity check, bid value and acceptance rates were examined. Importantly, a declining acceptance for higher compared to lower bids was found. Specifically, a chi-square test finds a strong statistical relationship between the two variables. This is consistent with economic theory that demand (marginal WTP) is expected to decline with an increase in price. We find that on average, Chinese WTP is about one-third of United States WTP measured in US dollars. However, adjusting for income differences across countries, we find average Chinese WTP is approximately twice the level of United States WTP. Our results also show a positive correlation between climate change and environmental awareness variables and WTP in both countries. In addition, political ideology for United States respondents is found to have a significant influence on WTP even when controlling for other covariates, such as environmental concern and climate change belief. These findings are especially important given the anticipated costs of addressing climate change by putting a price on GHG emissions. This presentation builds on our first presentation exploring American and Chinese citizens’ views on whether they think their country should join an international climate change treaty using data from the same survey.
A Contingent Valuation Study Comparing Public Willingness to Pay for Climate Change Mitigation in China and the United
Union Wisconsin Room
Climate change could be the single most important issue of our time. As the world’s two largest greenhouse gas (GHG) polluters, the United States and China are of particular interest in the discussion on climate change. Because the costs/benefits of taking climate action arise in a non-market environmental setting, we employ a contingent valuation method to estimate public willingness-to-pay (WTP) as a measure of supporting policy action. Specifically, this study employs a double-bounded dichotomous choice (DBDC) framework to elicit WTP values from citizens in both China and the United States. The data used here are from surveys conducted in the United States (n=3,641) and China (n=3,717) between September and November 2013. The DBDC model consists of two WTP questions both of which can be answered yes or no. Respondents were informed that most policies to address climate change involve putting a price on GHG emissions that will likely increase household expenditures on heating, electricity, transportation, food and other goods and services. They were then asked if they would support a policy to address climate change if it increased their average monthly household expenditures by one of three initial bid amounts. Responses of no to that bid amount are followed up with a lower amount, while yes responses are followed up with a higher amount. As a validity check, bid value and acceptance rates were examined. Importantly, a declining acceptance for higher compared to lower bids was found. Specifically, a chi-square test finds a strong statistical relationship between the two variables. This is consistent with economic theory that demand (marginal WTP) is expected to decline with an increase in price. We find that on average, Chinese WTP is about one-third of United States WTP measured in US dollars. However, adjusting for income differences across countries, we find average Chinese WTP is approximately twice the level of United States WTP. Our results also show a positive correlation between climate change and environmental awareness variables and WTP in both countries. In addition, political ideology for United States respondents is found to have a significant influence on WTP even when controlling for other covariates, such as environmental concern and climate change belief. These findings are especially important given the anticipated costs of addressing climate change by putting a price on GHG emissions. This presentation builds on our first presentation exploring American and Chinese citizens’ views on whether they think their country should join an international climate change treaty using data from the same survey.
