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

Author

Listed:
  • 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.

Suggested Citation

  • Videras Julio R & Owen Ann L, 2006. "Public Goods Provision and Well-Being: Empirical Evidence Consistent with the Warm Glow Theory," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-40, April.
  • Handle: RePEc:bpj:bejeap:v:contributions.5:y:2006:i:1:n:9
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    Citations

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    Cited by:

    1. Heinz Welsch & Jan Kuehling, 2017. "How Green Self Image Affects Subjective Well-Being: Pro-Environmental Values as a Social Norm," Working Papers V-404-17, University of Oldenburg, Department of Economics, revised Oct 2017.
    2. repec:eee:jeborg:v:137:y:2017:i:c:p:304-323 is not listed on IDEAS
    3. Alpaslan Akay & Olivier Bargain & Mathias Dolls & Dirk Neumann & Andreas Peichl & Sebastian Siegloch, 2012. "Happy Taxpayers? Income Taxation and Well-Being," SOEPpapers on Multidisciplinary Panel Data Research 526, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Baron, David P., 2008. "Managerial contracting and corporate social responsibility," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 268-288, February.
    5. Kontogianni, A. & Tourkolias, C. & Machleras, A. & Skourtos, M., 2012. "Service providing units, existence values and the valuation of endangered species: A methodological test," Ecological Economics, Elsevier, vol. 79(C), pages 97-104.
    6. 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.
    7. Cordero Salas, Paula, 2013. "Cooperation and reciprocity in carbon sequestration contracts," Policy Research Working Paper Series 6521, The World Bank.
    8. 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.
    9. 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.
    10. Mark Hudson & Ian Hudson & Jason D. Edgerton, 2013. "Political Consumerism in Context: An Experiment on Status and Information in Ethical Consumption Decisions," American Journal of Economics and Sociology, Wiley Blackwell, vol. 72(4), pages 1009-1037, October.
    11. Martha A. Starr, 2015. "The Economics of Ethical Consumption," Working Papers 2015-01, American University, Department of Economics.
    12. Baron, David P., 2006. "Managerial Contracting and Corporate Social Responsibility," Research Papers 1945, Stanford University, Graduate School of Business.
    13. 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.
    14. Pascal Nguyen & Anna Nguyen, 2015. "The effect of corporate social responsibility on firm risk," Social Responsibility Journal, Emerald Group Publishing, vol. 11(2), pages 324-339, June.

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