How Environmental Regulation Affects Rural Residents’ Willingness to Pay for Sustainable Domestic Sewage Treatment: Mediating and Interaction Effects

Abstract

Exploring the construction of effective payment mechanisms for rural residents could break the dilemma of the value of a single investment by the government in environmental governance and promote the process of sustainable rural domestic sewage treatment (RDST). The effects of environmental regulations have been roughly approved; however, their influence mechanisms on rural residents’ willingness to pay (WTP) and payment level for sustainable RDST have not been fully revealed. Based on a database of 744 respondents, an integrated model was developed to verify the heterogeneous effects of three environmental regulations on rural residents’ WTP and further explore their interaction effects and impact mechanisms. In addition, there is an urgent necessity to explore the effectiveness of implementing different combinations of environmental regulations. Our results indicated that, firstly, the guiding regulation and incentive regulation promoted rural residents’ WTP and payment level, whereas the binding regulation had a limited impact on individuals. Secondly, rural residents’ cognition mediated the effect of the environmental regulations on their WTP and payment level. Lastly, the guiding and incentive regulations showed a substitution relationship, while both guiding and binding regulations as well as incentive and binding regulations revealed a complementary relationship. The implications of these results indicate the importance of strengthening the public attention on the environmental and health hazards of rural domestic sewage and effectively raising rural residents’ environmental cognition and environmental protection awareness, thereby increasing their WTP and payment level for sustainable RDST. This study provides credible references and recommendations for environmental regulations’ formulation and policy optimization for RDST, as well as for the construction of payment systems for rural residents, and inspiration for rural environment management in other developing countries.