Do subjective well-being influence people’s willingness to pay for improved air quality: evidence from China

Air pollution poses a great danger to human health and economic development, and understanding people’s willingness to pay for improved air quality (WTPA) impacts environmental protection. This paper investigates WTPA based on the perspective of subjective well-being (SWB) and analyzes the mediating role of social interaction on the relationship between the two. This paper distinguishes social interactions into online and offline interactions and analyzes whether the mediating effect of the two different interactions on SWB and WTPA exists separately. Using data from the 2018 China General Social Survey (CGSS), we find that SWB has a significant positive effect on WTPA, individuals with higher well-being have higher pro-environmental willingness; there is no age, education level, sex of the person, or regional heterogeneity in the effect of SWB on WTPA; offline social interactions play a partially mediating role between SWB and WTPA, while online social interactions failed to mediate between the two. This paper’s policy implication is that improving residents’ subjective well-being is both an important development goal and an essential way to resolve the conflict between economic development and environmental protection.