Double-Hurdle Approach to Understanding Household Willingness to Pay for Public Flood Mitigation Infrastructure in Vietnam

The understanding of household willingness to pay for improving the public drainage infrastructure remains limited, especially in the low- and middle-income classes. To advance this literature, we construct a comprehensive behavioral framework that integrates the protection motivation theory, collective action theory, and social exchange theory to explain household financial engagement in urban flood mitigation. The double hurdle model is applied to disentangle the household decision-making process into two stages, namely, participation and payment level, using data from 627 households in Nghe An Province, Vietnam. Results reveal that risk perception, education, age, and size of a household significantly relate to stronger willingness to participate and stronger willingness to pay for the improvement of the public drainage infrastructure, while the monthly income and trust in government policies of a household exert unexpected negative effects in both stages. Prior flood damage is found to significantly increase payment amounts but not the participation likelihood. Our double hurdle approach is superior to the Tobit model by revealing the distinct behavioral mechanisms of the low- to middle-income households underlying their contributions to the shared infrastructure.