Economic Effects of Ecological Compensation Policy in Shiyang River Basin: Empirical Research Based on DID and RDD Models

Abstract

In order to achieve the sustainable development of ecological resources and social economy in the Shiyang River Basin, a series of Ecological Compensation policies have been implemented in the basin. This study takes these policies as an opportunity to design an experiment. The nine counties (districts) affected by these policies are used as the experimental samples, and the period from 2000 to 2019 is the experimental period. The difference-in-differences method is used to study the effect of the series of Ecological Compensation policies in the Shiyang River Basin on the economic development of the basin. Furthermore, the regression discontinuity design was used to estimate the time and mechanism of this effect. The research found that the early start of phase I of the Key Governance Planning Project in 2006 played a significant and continuous promotive role in the economic development of the river basin; the Water Resources Allocation and Regulation Plan significantly promoted the development of tertiary industry in 2005–2007; the Key Governance Planning significantly promoted the development of primary industry in 2007–2010. The results suggest that to optimize the industrial structure to the maximum extent in the future and promote the sustainable development of ecological resources and social economy in the Shiyang River Basin, economic changes, such as water-saving green agriculture and eco-tourism, should be developed.