IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v151y2018icp173-183.html

Climate Change, Population Ageing and Public Spending: Evidence on Individual Preferences

Author

Listed:
  • Andor, Mark A.
  • Schmidt, Christoph M.
  • Sommer, Stephan

Abstract

Economic theory as well as empirical research suggest that elderly people prefer public spending on policies yielding short-term benefits. This might be bad news for policies aimed at combating climate change: while the unavoidable costs of these policies arise today, the expected benefits occur in the distant future. Drawing on data from over 12,000 households and using the ordered logit and the generalized ordered logit model, we analyze whether attitudes towards climate change and climate policies as well as public spending preferences differ with respect to age. Our estimates show that elderly people are less concerned about climate change, but more concerned about other global challenges. Furthermore, they are less likely to support climate-friendly policies, such as the subsidization of renewables, allocate less public resources to and have lower willingness-to-pay for environmental policies. Thus, our results suggest that the ongoing demographic change in industrialized countries may undermine climate policies.

Suggested Citation

  • Andor, Mark A. & Schmidt, Christoph M. & Sommer, Stephan, 2018. "Climate Change, Population Ageing and Public Spending: Evidence on Individual Preferences," Ecological Economics, Elsevier, vol. 151(C), pages 173-183.
    • Handle: RePEc:eee:ecolec:v:151:y:2018:i:c:p:173-183
    DOI: 10.1016/j.ecolecon.2018.05.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800917307607
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2018.05.003?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

    for a different version of it.

    References listed on IDEAS

    as
    1. Frondel, Manuel & Vance, Colin, 2010. "Fixed, random, or something in between? A variant of Hausman's specification test for panel data estimators," Economics Letters, Elsevier, vol. 107(3), pages 327-329, June.
    2. Jäger, Philipp & Schmidt, Torsten, 2016. "The political economy of public investment when population is aging: A panel cointegration analysis," European Journal of Political Economy, Elsevier, vol. 43(C), pages 145-158.
    3. Disney, Richard, 2007. "Population ageing and the size of the welfare state: Is there a puzzle to explain?," European Journal of Political Economy, Elsevier, vol. 23(2), pages 542-553, June.
    4. Shelton, Cameron A., 2008. "The aging population and the size of the welfare state: Is there a puzzle?," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 647-651, April.
    5. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1986. "Fairness and the Assumptions of Economics," The Journal of Business, University of Chicago Press, vol. 59(4), pages 285-300, October.
    6. L.G. Leon-Novelo & X. Zhou & B. Nebiyou Bekele & P. Müller, 2010. "Assessing Toxicities in a Clinical Trial: Bayesian Inference for Ordinal Data Nested within Categories," Biometrics, The International Biometric Society, vol. 66(3), pages 966-974, September.
    7. Hausman, Jerry A & Taylor, William E, 1981. "Panel Data and Unobservable Individual Effects," Econometrica, Econometric Society, vol. 49(6), pages 1377-1398, November.
    8. Shelton, Cameron A., 2008. "Addendum: The aging population and the size of the welfare state: Is there a puzzle? [Journal of Public Economics 92 (2008) 625-671]," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2282-2283, October.
    9. 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.
    10. Jeremiah Bohr, 2017. "Is it hot in here or is it just me? Temperature anomalies and political polarization over global warming in the American public," Climatic Change, Springer, vol. 142(1), pages 271-285, May.
    11. John, A. & Pecchenino, R. & Schimmelpfennig, D. & Schreft, S., 1995. "Short-lived agents and the long-lived environment," Journal of Public Economics, Elsevier, vol. 58(1), pages 127-141, September.
    12. 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.
    13. Sonia Akter & Jeff Bennett & Michael B. Ward, 2013. "Climate change scepticism and public support for mitigation: evidence from an Australian choice experiment," Monash Economics Working Papers archive-47, Monash University, Department of Economics.
    14. Tjernström, E. & Tietenberg, T., 2008. "Do differences in attitudes explain differences in national climate change policies?," Ecological Economics, Elsevier, vol. 65(2), pages 315-324, April.
    15. David Popp, 2001. "Altruism and the Demand for Environmental Quality," Land Economics, University of Wisconsin Press, vol. 77(3), pages 339-349.
    16. Jeffrey Carpenter & Cristina Connolly & Caitlin Myers, 2008. "Altruistic behavior in a representative dictator experiment," Experimental Economics, Springer;Economic Science Association, vol. 11(3), pages 282-298, September.
    17. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    18. Martin Achtnicht, 2012. "German car buyers’ willingness to pay to reduce CO 2 emissions," Climatic Change, Springer, vol. 113(3), pages 679-697, August.
    19. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65(2), pages 135-135.
    20. Cattaneo, M. Alejandra & Wolter, Stefan C., 2009. "Are the elderly a threat to educational expenditures?," European Journal of Political Economy, Elsevier, vol. 25(2), pages 225-236, June.
    21. Paul M. Kellstedt & Sammy Zahran & Arnold Vedlitz, 2008. "Personal Efficacy, the Information Environment, and Attitudes Toward Global Warming and Climate Change in the United States," Risk Analysis, John Wiley & Sons, vol. 28(1), pages 113-126, February.
    22. Assaf Razin & Efraim Sadka & Phillip Swagel, 2002. "The Aging Population and the Size of the Welfare State," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 900-918, August.
    23. Manuel Frondel & Colin Vance, 2010. "Fixed, Random, or Something in Between? – A Variant of HAUSMAN’s Specifi cation Test for Panel Data Estimators," Ruhr Economic Papers 0160, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    24. Richard Williams, 2010. "Fitting heterogeneous choice models with oglm," Stata Journal, StataCorp LLC, vol. 10(4), pages 540-567, December.
    25. J. Scott Long & Jeremy Freese, 2006. "Regression Models for Categorical Dependent Variables using Stata, 2nd Edition," Stata Press books, StataCorp LLC, edition 2, number long2, March.
    26. Lindeboom, Maarten & van Doorslaer, Eddy, 2004. "Cut-point shift and index shift in self-reported health," Journal of Health Economics, Elsevier, vol. 23(6), pages 1083-1099, November.
    27. Bercedis Peterson & Frank E. Harrell, 1990. "Partial Proportional Odds Models for Ordinal Response Variables," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 39(2), pages 205-217, June.
    28. Antonio Rangel, 2003. "Forward and Backward Intergenerational Goods: Why Is Social Security Good for the Environment?," American Economic Review, American Economic Association, vol. 93(3), pages 813-834, June.
    29. Achtnicht, Martin, 2009. "German car buyers' willingness to pay to reduce CO₂ emissions," ZEW Discussion Papers 09-058, ZEW - Leibniz Centre for European Economic Research.
    30. Inglehart, Ronald, 1971. "The Silent Revolution in Europe: Intergenerational Change in Post-Industrial Societies," American Political Science Review, Cambridge University Press, vol. 65(4), pages 991-1017, December.
    31. Richard Williams, 2006. "Generalized ordered logit/partial proportional odds models for ordinal dependent variables," Stata Journal, StataCorp LLC, vol. 6(1), pages 58-82, March.
    32. repec:aen:journl:ej38-si1-frondel is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Anwesha Banerjee & Andrea Erhart & Claire Rimbaud, 2025. "A Green Old Age? Contrasting Pro-Environmental Attitudes and Behavior Among Young and Old Adults," Working Papers 2025-05, Faculty of Economics and Statistics, Universität Innsbruck.
    2. Knollenborg, Leonard & Sommer, Stephan, 2021. "Diverging beliefs on climate change and climate policy in Germany: The role of political orientations," Ruhr Economic Papers 909, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. Baiardi, Donatella & Morana, Claudio, 2021. "Climate change awareness: Empirical evidence for the European Union," Energy Economics, Elsevier, vol. 96(C).
    4. Sofia Galeotti & Luca Cacchiarelli & Eleonora Sofia Rossi & Roberto Henke & Raffaella Zucaro, 2025. "The Role of Italian Local Agencies for Water Management in the Mitigation of and Adaptation to Climate Change: Stated Preference Methods for Future Sustainable Strategies," Sustainability, MDPI, vol. 17(8), pages 1-18, April.
    5. Leonardo Becchetti & Gianluigi Conzo, 2022. "Preferences for climate change-related fiscal policies in European countries: drivers and seasonal effects," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(3), pages 1083-1113, October.
    6. Cotofan, Maria & Kuralbayeva, Karlygash & Matakos, Konstantinos, 2024. "Global warming cools voters down: how climate concerns affect policy preferences," LSE Research Online Documents on Economics 126818, London School of Economics and Political Science, LSE Library.
    7. Donglan Zha & Pan Liu & Hui Shi, 2022. "Does population aging aggravate air pollution in China?," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 27(2), pages 1-14, February.
    8. Littlefair, David & Stark, Graham & Johnson, Sophie B. & Atkinson, Joanne & Reed, Howard & Johnson, Elliott A. & Johnson, Matthew, 2026. "Reliability and affordability: understanding the reasons for UK voters’ support for nationalisation and public control," Transport Policy, Elsevier, vol. 176(C).
    9. Baskaran, Thushyanthan & Hessami, Zohal & Schirner, Sebastian, 2024. "Young versus old politicians and public spending priorities," Journal of Economic Behavior & Organization, Elsevier, vol. 225(C), pages 88-106.
    10. Tian Xiong & Kaan Celebi & Paul J. J. Welfens, 2022. "OECD countries’ twin long-run challenge: The impact of aging dynamics and increasing natural disasters on savings ratios," International Economics and Economic Policy, Springer, vol. 19(4), pages 741-759, October.
    11. Baskaran, Thushyanthan & Hessami, Zohal & Schirner, Sebastian, 2024. "Young versus Old Politicians in Local Politics," IZA Discussion Papers 17009, IZA Network @ LISER.
    12. Hoyong Jung, 2023. "Do young politicians make a difference? Evidence from local public expenditure in South Korea," Economics of Governance, Springer, vol. 24(4), pages 473-499, December.
    13. Rauscher, Michael, 2019. "Demographic change and climate change," Thuenen-Series of Applied Economic Theory 160, University of Rostock, Institute of Economics.
    14. Voorintholt, Lieke & van den Berg, Gerard J. & Soetevent, Adriaan R., 2025. "For the Future of Our Grandchildren: Grandparenthood and Climate Change Concerns," IZA Discussion Papers 17795, IZA Network @ LISER.
    15. repec:rim:rimwps:21-16 is not listed on IDEAS
    16. Leonard Knollenborg & Stephan Sommer, 2023. "Diverging Beliefs on Climate Change and Climate Policy: The Role of Political Orientation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(4), pages 1031-1049, April.
    17. Seojeong Oh & Benjamin M. Gramig, 2023. "Valuing Ecosystem Services and Downstream Water Quality Improvement in the U.S. Corn Belt," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 85(3), pages 823-872, August.
    18. Carstensen, Laura L. & Reynolds, Megan E., 2023. "Age differences in preferences through the lens of socioemotional selectivity theory," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    19. Vittoria Socci & Eleonora Vitanza & Chiara Mocenni, 2025. "An agent-based model to foster citizens’ sustainable behavior in the Italian city of Siena," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 98(4), pages 1-20, April.
    20. Baiardi, Donatella & Cristofoletti, Enrico & Menegatti, Mario, 2025. "It only works if you believe in it: How climate change awareness affects the effectiveness of energy initiatives," Energy Economics, Elsevier, vol. 151(C).
    21. Lo Prete, Anna & Sacchi, Agnese, 2025. "Government spending and civic engagement: exploring the role of civil society participation and voting in 28 democracies," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202513, University of Turin.
    22. Sommer, Stephan & Mattauch, Linus & Pahle, Michael, 2022. "Supporting carbon taxes: The role of fairness," Ecological Economics, Elsevier, vol. 195(C).
    23. Donatella Baiardi, 2023. "What do you think about climate change?," Journal of Economic Surveys, Wiley Blackwell, vol. 37(4), pages 1255-1313, September.
    24. Donatella Baiardi, 2021. "What do you think about climate change?," Working Papers 477, University of Milano-Bicocca, Department of Economics, revised Aug 2021.

    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. Casamatta, G. & Batté, L., 2016. "The Political Economy of Population Aging," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 381-444, Elsevier.
    2. Gianko Michailidis & Concepció Patxot & Meritxell Solé, 2019. "Do pensions foster education? An empirical perspective," Applied Economics, Taylor & Francis Journals, vol. 51(38), pages 4127-4150, August.
    3. Sørensen, Rune J., 2013. "Does aging affect preferences for welfare spending? A study of peoples' spending preferences in 22 countries, 1985–2006," European Journal of Political Economy, Elsevier, vol. 29(C), pages 259-271.
    4. Hollanders, D.A. & Koster, F., 2012. "The Graying of the Median Voter," Discussion Paper 2012-061, Tilburg University, Center for Economic Research.
    5. Gianko Michailidis & Concepció Patxot, 2018. "Political viability of intergenerational transfers. An empirical application," UB School of Economics Working Papers 2018/370, University of Barcelona School of Economics.
    6. Shimasawa, Manabu & Oguro, Kazumasa & Toyoda, Nao, 2014. "Does Japan have a Gray Democracy? An empirical analysis of prefectural data," CIS Discussion paper series 615, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    7. Martijn J. van den Assem & Dennie van Dolder & Richard H. Thaler, 2012. "Split or Steal? Cooperative Behavior When the Stakes Are Large," Management Science, INFORMS, vol. 58(1), pages 2-20, January.
    8. Tim Krieger & Jens Ruhose, 2013. "Honey, I shrunk the kids’ benefits—revisiting intergenerational conflict in OECD countries," Public Choice, Springer, vol. 157(1), pages 115-143, October.
    9. Hollanders, D.A. & Koster, F., 2012. "The Graying of the Median Voter," Other publications TiSEM e94711e6-6bd1-4fdb-9c78-4, Tilburg University, School of Economics and Management.
    10. Richard Williams, 2009. "Using Heterogeneous Choice Models to Compare Logit and Probit Coefficients Across Groups," Sociological Methods & Research, , vol. 37(4), pages 531-559, May.
    11. Carolina Laureti, 2015. "The Debt Puzzle in Dhaka’s Slums: Do Poor People Co-hold for Liquidity Needs?," Working Papers CEB 15-021, ULB -- Universite Libre de Bruxelles.
    12. Charlie Tchinda & Marcus Dejardin, 2021. "Are Business Policy Measures in Response to the COVID-19 Pandemic to Be Equally Valued? An Exploration According to SMEs Owners’ Business Expectations," Sustainability, MDPI, vol. 13(21), pages 1-42, October.
    13. Wixe, Sofia & Nilsson, Pia & Naldi, Lucia & Westlund, Hans, 2017. "Disentangling Innovation in Small Food Firms: The role of External Knowledge, Support, and Collaboration," Working Paper Series in Economics and Institutions of Innovation 446, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    14. Matteo M. Galizzi & Daniel Navarro-Martinez, 2019. "On the External Validity of Social Preference Games: A Systematic Lab-Field Study," Management Science, INFORMS, vol. 65(3), pages 976-1002, March.
    15. Jon Anderson & Stephen Burks & Jeffrey Carpenter & Lorenz Götte & Karsten Maurer & Daniele Nosenzo & Ruth Potter & Kim Rocha & Aldo Rustichini, 2013. "Self-selection and variations in the laboratory measurement of other-regarding preferences across subject pools: evidence from one college student and two adult samples," Experimental Economics, Springer;Economic Science Association, vol. 16(2), pages 170-189, June.
    16. Florian Haelg & Niklas Potrafke & Jan-Egbert Sturm, 2022. "The determinants of social expenditures in OECD countries," Public Choice, Springer, vol. 193(3), pages 233-261, December.
    17. Siliverstovs, Boriss & Kholodilin, Konstantin A. & Thiessen, Ulrich, 2011. "Does aging influence structural change? Evidence from panel data," Economic Systems, Elsevier, vol. 35(2), pages 244-260, June.
    18. Xindong Xue & W. Robert Reed, 2015. "The Relationship Between Social Capital And Health In China," Working Papers in Economics 15/05, University of Canterbury, Department of Economics and Finance.
    19. Georganas, Sotiris & Laliotis, Ioannis & Velias, Alina, 2022. "The best is yet to come: The impact of retirement on prosocial behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 589-615.
    20. Ulrich Thießen & Konstantin A. Kholodilin & Boriss Siliverstovs, 2008. "Does Aging Influence Sectoral Employment Shares?: Evidence from Panel Data," Discussion Papers of DIW Berlin 785, DIW Berlin, German Institute for Economic Research.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • 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:eee:ecolec:v:151:y:2018:i:c:p:173-183. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    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.