Evidence Of Well-educated People’s Demand For Environmental Quality

In recent years, Chinese cities have experienced rapid urbanization and economicgrowth. This uncontrolled development of human activities is exerting heavy pressureon the environment, so much so that urban quality of life is affected by environmentaldegradation. The environmental Kuznets curve (EKC) hypothesis posits an invertedU-shaped relationship between environmental degradation and income growth. Inother words, environmental degradation decreases after income reaches a thresholdvalue called “turning point”. Demand for environmental quality is one of the keyforces that contribute to this economic mechanism for improving environmentalquality.In the wake of the increase in urban income and education attainment, urbanresidents have begun to exhibit higher demand for environmental quality andenvironmental awareness. This thesis focuses on the newly emerging class ofwell-educated people who has a louder voice and leadership in the development ofChinese cities. By examining the features of their demand for environmental quality,we analyze whether their higher willingness-to-pay for environmental quality can be adriving force for the rise of green cities in China. Through a multi-method approach,this thesis investigates their perception and concern about quality of life andenvironmental quality through in-depth interviews and survey on quality of lifesatisfaction. Then, a cross-sectional model of energy consumption is constructed andestimated by econometric techniques to analyze whether their concern is convertedinto action.Empirical results indicate that well-educated people exhibit a higher demand forquality of life, and particularly environmental quality. Since they have a betterunderstanding of long-term issues, they are more aware that environmentaldegradation affects their quality of life, and thus they are more concerned aboutenvironmental degradation. In addition to environmental concern, they have proactivebehavior in favor of the environment. Qualitative analysis of interview transcriptsindicates strong environmental consideration in their individual choices such asresidential location, commuting mode or energy consumption. Based on a quantitative analysis of energy consumption using data from a survey carried out by the NationalBureau of Statistics of China on2,500households from Beijing, Chengdu, Shanghai,and Shenzhen, this thesis suggests that their income elasticity in household energyexpenditures is lower than that of less-educated people. Each additional year ofeducation reduces the income elasticity by0.005. The purchase of energy-efficientappliances or a green-oriented way of life may account for this decrease in energyconsumption growth.The findings of this research reveal the role of educational attainment in theinternal mechanism of the EKC hypothesis. As this burgeoning group of well-educatedpeople is the future elite and decision-makers of the Chinese society, this thesisdelivers an optimistic outlook on the improvement of environmental quality inChinese cities, and provides important policy implications for China’s future cities.Further research should examine how to internalize their demand for environmentalquality so that they could effectively contribute to the rise of China’s green cities.