A multilevel analysis of the determinants of willingness to pay to prevent environmental pollution across countries

This paper discusses the extent to which individual and contextual level factors influence the likelihood of individuals’ willingness to pay (WTP) to prevent environmental pollution. A multilevel probit regression framework was set up to explain WTP to prevent environmental pollution. We use data from the World Values Survey (WVS), which contains socio-economic and socio-demographic information, and merged it with country level covariates. Compared to many previous studies, our dataset encompasses a more indepth set of individual level covariates. We find that rich people, individuals with higher education, as well as those who possess post-materialist values are more likely to be concerned about environmental pollution. This study reveals that in developed countries, 90% of country variation in WTP to prevent environmental pollution can be explained by individual characteristics. This portion reduces to 80% in the case of developing countries. An interesting feature in our study is the ability to investigate the effect of contextual factors on individuals’ willingness to contribute for the environment. We observe that both democracy and government stability reduce individuals’ intention to donate to prevent environmental damage mainly in developed countries.