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How do people discount over spatial distance?

Author

Listed:
  • Bruttel Lisa
  • Ziemann Niklas

    (26583 University of Potsdam, Department of Economics and Social Sciences, August-Bebel-Str. 89, 14482, Potsdam, Germany)

Abstract

This paper studies how individuals discount the utility they derive from their provision of goods over spatial distance. In a controlled laboratory experiment in Germany, we elicit preferences for the provision of the same good at different locations. To isolate spatial preferences from any other direct value of the goods being close to the individual, we focus on goods with “existence value.” We find that individuals put special weight on the provision of these goods in their immediate vicinity. This “vicinity bias” represents a spatial analogy to the “present bias” in the time dimension.

Suggested Citation

  • Bruttel Lisa & Ziemann Niklas, 2023. "How do people discount over spatial distance?," German Economic Review, De Gruyter, vol. 24(1), pages 33-67, February.
    • Handle: RePEc:bpj:germec:v:24:y:2023:i:1:p:33-67:n:1
    DOI: 10.1515/ger-2021-0106
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    More about this item

    Keywords

    spatial discounting; existence value; charitable giving; experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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