Pricing eco-products using happiness data: The case of China

Abstract

Linkages between eco-products and residents' happiness play a crucial role in global sustainable development. However, few studies have adopted happiness data to price eco-products and focused on the potential impact of eco-products on residents' happiness. In this paper, we match the 2010–2021 China General Social Survey (CGSS) microdata with interprovincial eco-product value and construct an eco-product pricing model based on the life satisfaction approach by measuring the marginal substitution effects of eco-product value and residents' incomes. The results of our study show that eco-product value realization significantly enhances the residents' happiness, which remains valid after a series of endogeneity and robustness tests. Eco-product value realization enhances residents' happiness by improving their perceptions of social fairness and promoting the development of green finance. Environmental regulation positively moderates eco-product value realization and residents' happiness. Based on the eco-product pricing model, the price of eco-products is ¥576.27, implying residents on average are willing to pay ¥576.27 for eco-products. The pricing results exhibit heterogeneity across various factors, including income, age, gender, education, marital status, number of children, workplace, and urban-rural differences. Specifically, residents with middle and high income, youth, male, high education, a high number of children, working in state-owned enterprises, and rural areas exhibit a higher willingness to pay for eco-products. Our study provides new insights into pricing the economic value of eco-products.