Welfare enhancement or environment improvement: How does China's rural revitalization assistance policy work? Evidence from China

In the context of sustainable development, the greatest challenge facing society today is to improve welfare of the disadvantaged while preserving the environment. This paper constructed a theoretical framework of “policy‐welfare‐environment,” explored the effects in terms of individual welfare enhancement and village environment improvement, and conduct empirical tests on a sample of 1208 rural households in China. The results show that: (1) The assistance policy can significantly improve the overall welfare of the disadvantaged groups, and meanwhile, it can improve different dimensions of welfare, with the degree from high to low was a social opportunity, spiritual feeling, and economic situation. (2) The assistance policy can increase the probability of adopting environmental protection behavior, which in turn can significantly improve the village environment. (3) Welfare improvements in social opportunities mediate between the assistance policy and village environment improvements, while improvements in spiritual feelings and economic status do not. In addition, there is age heterogeneity in the welfare enhancement effect of the policy in the economic status dimension and the spiritual feeling dimension. The conclusions provide valuable policy enlightenment for assistance policy formulation and environmental governance, and can protect the ecological environment while improving public welfare, which is in line with the trend of sustainable development.