Willingness to accept local CAFO development: actual water quality information and rural residents’ preferences for means of compensation

Abstract

Concentrated animal feeding operations (CAFOs) provide low-cost products but often face local opposition due to environmental externalities. Based on a two-time panel discrete choice experiment (DCE) of rural residents living near CAFOs in China, this study quantifies how water quality information disclosure and various means of compensation affect residents’ acceptance of local CAFO development. The findings reveal that: (1) Compensation programmes incorporating quasi-public goods and environmental offsets can improve residents’ acceptance of CAFOs, with environmental offsets yielding the highest utility to respondents. (2) Water quality information disclosure heightens legitimate risk awareness, increasing the likelihood of opting out and rejecting CAFO construction. When the contribution of crop production to water pollution is clarified, residents receiving favourable water quality testing results show a higher willingness to accept CAFO development than those receiving unfavourable testing results. These results suggest that policymakers should prioritize environmental offsets, strengthen environmental regulation to ensure compliance, and provide the public with objective interpretations of risks. This study offers valuable insights for promoting sustainable CAFO development in China and economies with similar institutional contexts.