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Interventional Impacts of Watershed Ecological Compensation on Regional Economic Differences: Evidence from Xin’an River, China

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  • Bing Yu

    (School of Business, Ningbo University, Ningbo 315211, China
    Donghai Research Institute, Ningbo University, Ningbo 315211, China)

  • Linan Chen

    (School of Business, Ningbo University, Ningbo 315211, China)

Abstract

Watershed ecological compensation (WEC) is a popular and effective policy instrument for promoting the coordinated development of environment protection and the regional economy in river basin areas. WEC affects the regional economic differences between upstream and downstream regions, as well as between protected areas and areas surrounding upstream regions. Thus, it is necessary to quantify these changes to ensure the balanced development of regions after the implementation of ecological compensation. In the present study, we established two types of Theil indexes for between-group inequalities (T HH and T HS ) and an intervention analysis model in order to evaluate and predict the effects on regional economic differences caused by WEC in the Xin’an River basin. The results showed that the intervention comprising WEC affected regional economic differences, where the economic gap widened between Huangshan City in the upstream region and Hangzhou City in the downstream region, as well as between Huangshan and its surrounding cities. However, the impacts of the intervention gradually decreased in the later pilot period. Considering the fairness of regional social development, we recommend increasing the compensation for protected areas in order to improve the self-development capacity of upstream regions.

Suggested Citation

  • Bing Yu & Linan Chen, 2020. "Interventional Impacts of Watershed Ecological Compensation on Regional Economic Differences: Evidence from Xin’an River, China," IJERPH, MDPI, vol. 17(17), pages 1-13, September.
    • Handle: RePEc:gam:jijerp:v:17:y:2020:i:17:p:6389-:d:407672
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    References listed on IDEAS

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    1. Shengnan Li & Baohang Hui & Cai Jin & Xuehan Liu & Fan Xu & Chong Su & Tan Li, 2022. "Considering Farmers’ Heterogeneity to Payment Ecosystem Services Participation: A Choice Experiment and Agent-Based Model Analysis in Xin’an River Basin, China," IJERPH, MDPI, vol. 19(12), pages 1-19, June.

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