IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v57y2014i3p405-429.html
   My bibliography  Save this article

Willingness to Pay for Voluntary Climate Action and Its Determinants: Field-Experimental Evidence

Author

Listed:
  • Johannes Diederich
  • Timo Goeschl

Abstract

The determinants of individual, voluntary climate action (VCA) in combating climate change and its potential scale are frequently debated in public but largely underresearched. We provide estimates of the willingness to individually reduce EU greenhouse gas emissions by one ton, using the European Union Emissions Trading Scheme. Estimates are derived from an online field experiment with a large, highly heterogenous, and Internet-representative sample of voting-aged Germans. Jointly estimating willingness to pay (WTP), non-indifference to VCA, and prior knowledge, we uncover important determinants of preferences for VCA, such as education, the information structure among the population, and exogenous environmental conditions. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Johannes Diederich & Timo Goeschl, 2014. "Willingness to Pay for Voluntary Climate Action and Its Determinants: Field-Experimental Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(3), pages 405-429, March.
    • Handle: RePEc:kap:enreec:v:57:y:2014:i:3:p:405-429
    DOI: 10.1007/s10640-013-9686-3
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10640-013-9686-3
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10640-013-9686-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Richard S. J. Tol, 1999. "The Marginal Costs of Greenhouse Gas Emissions," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 61-81.
    2. Jinkwon Lee, 2008. "The effect of the background risk in a simple chance improving decision model," Journal of Risk and Uncertainty, Springer, vol. 36(1), pages 19-41, February.
    3. Carlsson, Fredrik & Martinsson, Peter, 2001. "Do Hypothetical and Actual Marginal Willingness to Pay Differ in Choice Experiments?: Application to the Valuation of the Environment," Journal of Environmental Economics and Management, Elsevier, vol. 41(2), pages 179-192, March.
    4. Mohammed Abdellaoui & Aurelien Baillon & Laetitia Placido & Peter P. Wakker, 2011. "The Rich Domain of Uncertainty: Source Functions and Their Experimental Implementation," American Economic Review, American Economic Association, vol. 101(2), pages 695-723, April.
    5. Shogren, Jason F., 2006. "Experimental Methods and Valuation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 19, pages 969-1027, Elsevier.
    6. Richard S J Tol, 2018. "The Economic Impacts of Climate Change," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 12(1), pages 4-25.
    7. Joo-Suk Lee & Seung-Hoon Yoo & Seung-Jun Kwak, 2010. "Public's willingness to pay for preventing climate change," Applied Economics Letters, Taylor & Francis Journals, vol. 17(6), pages 619-622.
    8. Glenn Harrison, 2006. "Experimental Evidence on Alternative Environmental Valuation Methods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(1), pages 125-162, May.
    9. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December.
    10. Fredrik Carlsson & Mitesh Kataria & Alan Krupnick & Elina Lampi & Åsa Löfgren & Ping Qin & Susie Chun & Thomas Sterner, 2012. "Paying for Mitigation: A Multiple Country Study," Land Economics, University of Wisconsin Press, vol. 88(2), pages 326-340.
    11. Werner, Megan, 1999. "Allowing for Zeros in Dichotomous-Choice Contingent-Valuation Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(4), pages 479-486, October.
    12. Green, Donald Philip, 1992. "The Price Elasticity of Mass Preferences," American Political Science Review, Cambridge University Press, vol. 86(1), pages 128-148, March.
    13. Cameron, Trudy Ann, 1988. "A new paradigm for valuing non-market goods using referendum data: Maximum likelihood estimation by censored logistic regression," Journal of Environmental Economics and Management, Elsevier, vol. 15(3), pages 355-379, September.
    14. Cummings, Ronald G & Harrison, Glenn W & Rutstrom, E Elisabet, 1995. "Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible?," American Economic Review, American Economic Association, vol. 85(1), pages 260-266, March.
    15. Bulte, Erwin & Gerking, Shelby & List, John A. & de Zeeuw, Aart, 2005. "The effect of varying the causes of environmental problems on stated WTP values: evidence from a field study," Journal of Environmental Economics and Management, Elsevier, vol. 49(2), pages 330-342, March.
    16. Hans-Werner Sinn, 2008. "Public policies against global warming: a supply side approach," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(4), pages 360-394, August.
    17. Todd Cherry & Peter Frykblom & Jason Shogren & John List & Melonie Sullivan, 2004. "Laboratory Testbeds and Non-Market Valuation: The Case of Bidding Behavior in a Second-Price Auction with an Outside Option," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 29(3), pages 285-294, November.
    18. Timothy Haab, 1999. "Nonparticipation or Misspecification? The Impacts of Nonparticipation on Dichotomous Choice Contingent Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 14(4), pages 443-461, December.
    19. Boyle, Kevin J. & Welsh, Michael P. & Bishop, Richard C., 1988. "Validation of empirical measures of welfare change: comment," MPRA Paper 31237, University Library of Munich, Germany.
    20. John A. List, 2004. "Young, Selfish and Male: Field evidence of social preferences," Economic Journal, Royal Economic Society, vol. 114(492), pages 121-149, January.
    21. Timothy C. Haab & Kenneth E. McConnell, 2002. "Valuing Environmental and Natural Resources," Books, Edward Elgar Publishing, number 2427.
    22. Berrens, Robert P. & Bohara, Alok K. & Jenkins-Smith, Hank C. & Silva, Carol L. & Weimer, David L., 2004. "Information and effort in contingent valuation surveys: application to global climate change using national internet samples," Journal of Environmental Economics and Management, Elsevier, vol. 47(2), pages 331-363, March.
    23. Glenn Harrison, 2007. "House money effects in public good experiments: Comment," Experimental Economics, Springer;Economic Science Association, vol. 10(4), pages 429-437, December.
    24. Cameron, Trudy Ann & Englin, Jeffrey, 1997. "Respondent Experience and Contingent Valuation of Environmental Goods," Journal of Environmental Economics and Management, Elsevier, vol. 33(3), pages 296-313, July.
    25. Daniel McFadden, 1994. "Contingent Valuation and Social Choice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(4), pages 689-708.
    26. Grether, David M & Plott, Charles R, 1979. "Economic Theory of Choice and the Preference Reversal Phenomenon," American Economic Review, American Economic Association, vol. 69(4), pages 623-638, September.
    27. MacKerron, George J. & Egerton, Catrin & Gaskell, Christopher & Parpia, Aimie & Mourato, Susana, 2009. "Willingness to pay for carbon offset certification and co-benefits among (high-)flying young adults in the UK," Energy Policy, Elsevier, vol. 37(4), pages 1372-1381, April.
    28. Harrison, Glenn W. & Rutström, E. Elisabet, 2008. "Experimental Evidence on the Existence of Hypothetical Bias in Value Elicitation Methods," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 81, pages 752-767, Elsevier.
    29. Sonia Akter & Jeff Bennett, 2011. "Household perceptions of climate change and preferences for mitigation action: the case of the Carbon Pollution Reduction Scheme in Australia," Climatic Change, Springer, vol. 109(3), pages 417-436, December.
    30. Matthew J. Kotchen, 2009. "Voluntary Provision of Public Goods for Bads: A Theory of Environmental Offsets," Economic Journal, Royal Economic Society, vol. 119(537), pages 883-899, April.
    31. K. G. Mäler & J. R. Vincent (ed.), 2006. "Handbook of Environmental Economics," Handbook of Environmental Economics, Elsevier, edition 1, volume 2, number 2.
    32. Haab, Timothy C. & McConnell, Kenneth E., 1997. "Referendum Models and Negative Willingness to Pay: Alternative Solutions," Journal of Environmental Economics and Management, Elsevier, vol. 32(2), pages 251-270, February.
    33. Matthew J. Kotchen, 2009. "Voluntary Provision of Public Goods for Bads: A Theory of Environmental Offsets," Economic Journal, Royal Economic Society, vol. 119(537), pages 883-899, April.
    34. Glenn W. Harrison & Ronald M. Harstad & E. Elisabet Rutstr–m, 2004. "Experimental Methods and Elicitation of Values," Experimental Economics, Springer;Economic Science Association, vol. 7(2), pages 123-140, June.
    35. Löschel, Andreas & Sturm, Bodo & Vogt, Carsten, 2013. "The demand for climate protection—Empirical evidence from Germany," Economics Letters, Elsevier, vol. 118(3), pages 415-418.
    36. Starmer, Chris & Sugden, Robert, 1991. "Does the Random-Lottery Incentive System Elicit True Preferences? An Experimental Investigation," American Economic Review, American Economic Association, vol. 81(4), pages 971-978, September.
    37. Richard H. Thaler & Eric J. Johnson, 1990. "Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice," Management Science, INFORMS, vol. 36(6), pages 643-660, June.
    38. Jayson L. Lusk & Darren Hudson, 2004. "Willingness-to-Pay Estimates and Their Relevance to Agribusiness Decision Making," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(2), pages 152-169.
    39. William D. Nordhaus, 1993. "Reflections on the Economics of Climate Change," Journal of Economic Perspectives, American Economic Association, vol. 7(4), pages 11-25, Fall.
    40. James Konow, 2003. "Which Is the Fairest One of All? A Positive Analysis of Justice Theories," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1188-1239, December.
    41. Richard S. J. Tol, 2009. "The Economic Effects of Climate Change," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 29-51, Spring.
    42. Solomon, Barry D. & Johnson, Nicholas H., 2009. "Valuing climate protection through willingness to pay for biomass ethanol," Ecological Economics, Elsevier, vol. 68(7), pages 2137-2144, May.
    43. Keeler, James P & James, William L & Abdel-Ghany, Mohamed, 1985. "The Relative Size of Windfall Income and the Permanent Income Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(3), pages 209-215, June.
    44. Beilei Cai & Trudy Cameron & Geoffrey Gerdes, 2010. "Distributional Preferences and the Incidence of Costs and Benefits in Climate Change Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(4), pages 429-458, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Diederich, Johannes & Goeschl, Timo, 2011. "Willingness to Pay for Individual Greenhouse Gas Emissions Reductions: Evidence from a Large Field Experiment," Working Papers 0517, University of Heidelberg, Department of Economics.
    2. Diederich, Johannes & Goeschl, Timo, 2017. "To mitigate or not to mitigate: The price elasticity of pro-environmental behavior," Journal of Environmental Economics and Management, Elsevier, vol. 84(C), pages 209-222.
    3. Johannes Diederich & Timo Goeschl, 2013. "To Give or Not to Give: The Price of Contributing and the Provision of Public Goods," NBER Working Papers 19332, National Bureau of Economic Research, Inc.
    4. Diederich, Johannes & Goeschl, Timo, 2011. "Giving in a Large Economy: Price vs. Non-Price Effects in a Field Experiment," Working Papers 0514, University of Heidelberg, Department of Economics.
    5. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    6. Diederich, Johannes & Goeschl, Timo, 2017. "Does Mitigation Begin At Home?," Working Papers 0634, University of Heidelberg, Department of Economics.
    7. John K. Horowitz & Kenneth E. McConnell & James J. Murphy, 2013. "Behavioral foundations of environmental economics and valuation," Chapters, in: John A. List & Michael K. Price (ed.), Handbook on Experimental Economics and the Environment, chapter 4, pages 115-156, Edward Elgar Publishing.
    8. Johannes Lohse & Timo Goeschl & Johannes H. Diederich, 2017. "Giving is a Question of Time: Response Times and Contributions to an Environmental Public Good," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(3), pages 455-477, July.
    9. Shewmake, Sharon & Okrent, Abigail & Thabrew, Lanka & Vandenbergh, Michael, 2015. "Predicting consumer demand responses to carbon labels," Ecological Economics, Elsevier, vol. 119(C), pages 168-180.
    10. Alló, Maria & Loureiro, Maria L., 2014. "The role of social norms on preferences towards climate change policies: A meta-analysis," Energy Policy, Elsevier, vol. 73(C), pages 563-574.
    11. Richard Carson & Theodore Groves, 2007. "Incentive and informational properties of preference questions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May.
    12. Lohse, Johannes & Goeschl, Timo & Diederich , Johannes, 2014. "Giving is a question of time: Response times and contributions to a real world public good," Working Papers 0566, University of Heidelberg, Department of Economics.
    13. Nicolas Jacquemet & Robert‐Vincent Joule & Stéphane Luchini & Jason F. Shogren, 2011. "Do People Always Pay Less Than They Say? Testbed Laboratory Experiments with IV and HG Values," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(5), pages 857-882, October.
    14. Andreas Loschel & Michael Price & Laura Razzolini & Madeline Werthschulte, 2020. "Negative income shocks and the support of environmental policies - Insights from the COVID-19 pandemic," Framed Field Experiments 00710, The Field Experiments Website.
    15. repec:zbw:rwimat:079 is not listed on IDEAS
    16. Mark A. Andor & Manuel Frondel & Colin Vance, 2017. "Mitigating Hypothetical Bias: Evidence on the Effects of Correctives from a Large Field Study," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 777-796, November.
    17. Hensher, David A., 2010. "Hypothetical bias, choice experiments and willingness to pay," Transportation Research Part B: Methodological, Elsevier, vol. 44(6), pages 735-752, July.
    18. Andor Mark A. & Frondel Manuel & Vance Colin, 2014. "Hypothetische Zahlungsbereitschaft für grünen Strom: Bekundete Präferenzen privater Haushalte für das Jahr 2013," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 15(4), pages 355-366, December.
    19. Lea S. Svenningsen, 2019. "Social preferences for distributive outcomes of climate policy," Climatic Change, Springer, vol. 157(2), pages 319-336, November.
    20. Mark A. Andor & Manuel Frondel & Colin Vance, 2014. "Diskussionspapier: Zahlungsbereitschaft für grünen Strom – Die Kluft zwischen Wunsch und Wirklichkeit," RWI Materialien, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 27, 05.
    21. Jie He & Jérôme Dupras & Thomas G. Poder, 2018. "Payment and Provision Consequentiality in Voluntary Contribution Mechanism: Single or Double “Knife-Edge” Evidence?," Cahiers de recherche 18-02, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.

    More about this item

    Keywords

    Climate change; EU ETS; Field experiment; Online experiment; Public goods; Voluntary contributions; Voluntary climate action; Willingness to pay; C93; Q51; Q54;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:57:y:2014:i:3:p:405-429. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.