Status-Seeking to Environmental Income for Eco-Urbanization: Willingness-to-Pay vs Willingness-to-Invest

Posted: 2 Dec 2016 Last revised: 19 Oct 2020

See all articles by Zhan Wang

Zhan Wang

Peking University - National School of Development; Peking University - School of Advanced Agricultural Sciences

Xiangzheng Deng

Chinese Academy of Sciences (CAS) - Institute of Geographic Sciences and Natural Resources Research (IGSNRR)

Date Written: November 9, 2016

Abstract

We study the cause-effects of status-seeking options to the possibility of earning environmental income if the landscape rights can be well clarified at community level. Empirical estimates report at least 60-70 percent of the price rise for environmental amenities that means to earn environmental income if people want to follow others in a proportional increase to pay an extra amount of money for environmental infrastructures improvement (EII) to improve environmental quality (EQI), “EII for EQI” (abbr. EI-Q). It indicates that ‘ecological investment’ for bidding landscape rights can be driven by status-seeking income effects which ultimately determine the quality of environmental conservation. Survey statistics reflect that respondents are willing to pay for urban EI-Q more than peri-urban EI-Q in Beijing. It disobeys the theory of “Parzen window”, but estimations show that status-seeking effects significantly reallocate social benefits to peri-urban EI-Q with environmental income rise. Policy implication is that status-seeking option promotes public choices to democratic willingness to pay for non-local EI-Q if residents can earn environmental income from the price rise of their well-clarified landscape rights when environmental quality is improved, and the endowment effects can be compensated via policy guided crowdfunding project and the third party scientific monitoring of environmental quality improvement.

Keywords: Catching up with the Joneses; Ecological Infrastructure; Eco-Urbanization; Willingness-To-Pay; China

JEL Classification: D12; Q2; R2

Suggested Citation

Wang, Zhan and Deng, Xiangzheng, Status-Seeking to Environmental Income for Eco-Urbanization: Willingness-to-Pay vs Willingness-to-Invest (November 9, 2016). Available at SSRN: https://ssrn.com/abstract=2877658 or http://dx.doi.org/10.2139/ssrn.2877658

Zhan Wang (Contact Author)

Peking University - National School of Development ( email )

Beijing, 100871
China

Peking University - School of Advanced Agricultural Sciences ( email )

Beijing, 100871
China

Xiangzheng Deng

Chinese Academy of Sciences (CAS) - Institute of Geographic Sciences and Natural Resources Research (IGSNRR) ( email )

Beijing
China

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