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Pro-environmental behavior and rational consumer choice: Evidence from surveys of life satisfaction

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  • Welsch, Heinz
  • Kühling, Jan

Abstract

This paper theoretically and empirically investigates the hypothesis of decision error in environmental-friendly consumption. Existing evidence suggests that people make systematic mistakes in affective forecasting that lead to suboptimal decisions. The paper hypothesizes that such errors are important in the context of the private provision of environmental goods and shows in a simple theoretical model that decision errors imply a non-zero net marginal utility at the chosen level of environmental-friendly consumption. Using life satisfaction as a proxy for experienced utility, the empirical analysis finds a positive and significant association between life satisfaction and pro-environmental behavior, which is consistent with environmental-friendly consumption being less than individually optimal. The results are robust to controlling not only for socio-demographic characteristics but also for differences in environment-related personal attitudes.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Psychology.

Volume (Year): 31 (2010)
Issue (Month): 3 (June)
Pages: 405-420

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Handle: RePEc:eee:joepsy:v:31:y:2010:i:3:p:405-420

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Web page: http://www.elsevier.com/locate/joep

Related research

Keywords: Consumer choice Pro-environmental behavior Behavioral economics Life satisfaction Experienced utility Affective forecasting;

References

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  1. Luechinger, Simon & Raschky, Paul A., 2009. "Valuing flood disasters using the life satisfaction approach," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 620-633, April.
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  18. Welsch, Heinz, 2002. "Preferences over Prosperity and Pollution: Environmental Valuation Based on Happiness Surveys," Kyklos, Wiley Blackwell, vol. 55(4), pages 473-94.
  19. M. Sirgy, 1998. "Materialism and Quality of Life," Social Indicators Research, Springer, vol. 43(3), pages 227-260, March.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Affective Forecasting and Optimal Environmental Behaviour
    by Liam Delaney in Geary Behaviour Centre on 2010-12-30 15:11:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. repec:old:wpaper:322 is not listed on IDEAS
  2. Heinz Welsch & Jan Kühling, 2010. "Is Pro-Environmental Consumption Utility-Maximizing? Evidence from Subjective Well-Being Data," Working Papers V-322-10, University of Oldenburg, Department of Economics, revised Apr 2010.
  3. Heinz Welsch & Susana Ferreira, 2014. "Environment, Well-Being, and Experienced Preference," Working Papers V-367-14, University of Oldenburg, Department of Economics, revised May 2014.

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