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Public Goods Provision and Well-Being: Empirical Evidence Consistent with the Warm Glow Theory

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  • Videras Julio R

    ()
    (Hamilton College)

  • Owen Ann L

    ()
    (Hamilton College)

Abstract

Using a broad multi-country sample, we find that individuals who contribute to the public good of environmental protection report higher levels of life satisfaction and happiness. We show that this result is robust to the use of an instrumental variables technique and provide several pieces of evidence that this positive relationship between contributions and well-being is due to a warm-glow motive. First, well-being does not increase proportionally with contributions, consistent with the warm-glow model that it is the act of giving that generates utility. Second, individuals who think of themselves as socially responsible derive greater satisfaction from their contribution to environmental protection as would be the case if the contribution reinforces a favorable self image. Interestingly, conforming to a social norm may be a motivation for some individuals, but the presence of this motive depends on individual attitudes towards social responsibility. Among those who express the highest level of social responsibility, conforming to the norm makes them less satisfied with life. However, individuals with a moderate level of social responsibility do report higher levels of happiness when their public goods contributions conform to societal norms.

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File URL: http://www.degruyter.com/view/j/bejeap.2005.5.issue-1/bejeap.2006.5.1.1531/bejeap.2006.5.1.1531.xml?format=INT
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Bibliographic Info

Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

Volume (Year): 5 (2006)
Issue (Month): 1 (April)
Pages: 1-40

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Handle: RePEc:bpj:bejeap:v:contributions.5:y:2006:i:1:n:9

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Cited by:
  1. Baron, David P., 2008. "Managerial contracting and corporate social responsibility," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 268-288, February.
  2. Amir Barnea & Amir Rubin, 2010. "Corporate Social Responsibility as a Conflict Between Shareholders," Journal of Business Ethics, Springer, vol. 97(1), pages 71-86, November.
  3. Akay, Alpaslan & Bargain, Olivier & Dolls, Mathias & Neumann, Dirk & Peichl, Andreas & Siegloch, Sebastian, 2012. "Happy Taxpayers? Income Taxation and Well-Being," IZA Discussion Papers 6999, Institute for the Study of Labor (IZA).
  4. Cordero Salas, Paula, 2013. "Cooperation and reciprocity in carbon sequestration contracts," Policy Research Working Paper Series 6521, The World Bank.
  5. Natalia Melgar & Irene Mussio & Maximo Rossi, 2013. "Environmental Concern and Behavior: Do Personal Attributes Matter?," Documentos de Trabajo (working papers) 0113, Department of Economics - dECON.
  6. Baron, David P., 2006. "Managerial Contracting and Corporate Social Responsibility," Research Papers 1945, Stanford University, Graduate School of Business.
  7. Welsch, Heinz & K├╝hling, Jan, 2010. "Pro-environmental behavior and rational consumer choice: Evidence from surveys of life satisfaction," Journal of Economic Psychology, Elsevier, vol. 31(3), pages 405-420, June.
  8. Robison, Lindon J. & Siles, Marcelo E. & Jin, Songqing, 2011. "Social capital and the distribution of household income in the United States: 1980, 1990, and 2000," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(5), pages 538-547.

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