A holistic approach to evaluating environmental policy impact using a difference-in-differences model

Environmental protection policies (EPPs) play a pivotal role in advancing sustainable development and maintaining ecological balance by establishing clear directives and standards. However, a comprehensive methodology to evaluate the effectiveness of these policies remains underdeveloped. Here, we employ a difference-in-differences (DID) approach to assess the effectiveness of EPPs, using the implementation of the Resident Work (RW) policy as a quasi-natural experiment. Drawing on urban-level panel data from the Yangtze River Basin between 2016 and 2021, we demonstrate that the DID model robustly evaluates the RW policy's impact on water quality improvement. Cities that adopted the RW policy experienced a 0.0098 reduction in water pollution compared to non-adopting cities. A dynamic analysis revealed progressive water quality improvements over time, with stronger effects observed in economically disadvantaged cities. Furthermore, higher policy evaluation scores correlated with greater improvements in water quality. This study highlights the utility of the DID model in quantifying EPP effectiveness and offers a scalable framework for policy evaluation in environmental management.