IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v72y2011icp75-87.html

Some searches may not work properly. We apologize for the inconvenience.

   My bibliography  Save this article

Are pro-environmental consumption choices utility-maximizing? Evidence from subjective well-being data

Author

Listed:
  • Welsch, Heinz
  • Kühling, Jan

Abstract

This paper studies whether pro-environmental consumption choices are consistent with utility maximization and what role the consumption behavior of reference persons and one's own past behavior play in this context. By combining data on individuals' pro-environmental consumption from a unique data set with data on subjective well-being, we find that people could attain higher well-being (utility) by unilaterally consuming more environmentally friendly while at the same time reducing the quantity consumed. The distortions identified are smaller when people's reference persons consume more environmentally friendly and when the individual has a longer environmental friendly consumption history. We therefore conclude that learning from the behavior of others and from one's own past experience may help alleviate decision error in environment-friendly consumption.

Suggested Citation

  • Welsch, Heinz & Kühling, Jan, 2011. "Are pro-environmental consumption choices utility-maximizing? Evidence from subjective well-being data," Ecological Economics, Elsevier, vol. 72(C), pages 75-87.
    • Handle: RePEc:eee:ecolec:v:72:y:2011:i:c:p:75-87
    DOI: 10.1016/j.ecolecon.2011.04.015
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800911001686
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2011.04.015?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. Susana Ferreira & Mirko Moro, 2010. "On the Use of Subjective Well-Being Data for Environmental Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(3), pages 249-273, July.
    2. Tetsuo Ono, 2002. "Is habitual consumption harmful to the environment?," Economics Bulletin, AccessEcon, vol. 17(1), pages 1-10.
    3. Heinz Welsch & Jan Kühling, 2009. "Using Happiness Data For Environmental Valuation: Issues And Applications," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 385-406, April.
    4. Richard Layard, 2006. "Happiness and Public Policy: a Challenge to the Profession," Economic Journal, Royal Economic Society, vol. 116(510), pages 24-33, March.
    5. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
    6. Bruno Frey & Alois Stutzer, 2014. "Economic Consequences of Mispredicting Utility," Journal of Happiness Studies, Springer, vol. 15(4), pages 937-956, August.
    7. Welsch, Heinz & Kühling, Jan, 2009. "Determinants of pro-environmental consumption: The role of reference groups and routine behavior," Ecological Economics, Elsevier, vol. 69(1), pages 166-176, November.
    8. George Loewenstein & Ted O'Donoghue & Matthew Rabin, 2003. "Projection Bias in Predicting Future Utility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1209-1248.
    9. Loewenstein, George & Adler, Daniel, 1995. "A Bias in the Prediction of Tastes," Economic Journal, Royal Economic Society, vol. 105(431), pages 929-937, July.
    10. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    11. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
    12. Wendner, Ronald, 2003. "Do habits raise consumption growth?," Research in Economics, Elsevier, vol. 57(2), pages 151-163, June.
    13. Kjell Arne Brekke & Richard B. Howarth, 2002. "Status, Growth and the Environment," Books, Edward Elgar Publishing, number 2160, December.
    14. Daniel Kahneman & Peter P. Wakker & Rakesh Sarin, 1997. "Back to Bentham? Explorations of Experienced Utility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 375-406.
    15. Jason F. Shogren & Laura O. Taylor, 2008. "On Behavioral-Environmental Economics," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(1), pages 26-44, Winter.
    16. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    17. Welsch, Heinz & Kühling, 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.
    18. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    19. Wier, Mette & O'Doherty Jensen, Katherine & Andersen, Laura Mørch & Millock, Katrin, 2008. "The character of demand in mature organic food markets: Great Britain and Denmark compared," Food Policy, Elsevier, vol. 33(5), pages 406-421, October.
    20. Rafael Di Tella & Robert MacCulloch, 2006. "Some Uses of Happiness Data in Economics," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 25-46, Winter.
    21. Carroll, Christopher D., 2000. "Solving consumption models with multiplicative habits," Economics Letters, Elsevier, vol. 68(1), pages 67-77, July.
    22. Howarth, Richard B., 1996. "Status effects and environmental externalities," Ecological Economics, Elsevier, vol. 16(1), pages 25-34, January.
    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. 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. repec:zbw:hohpro:322 is not listed on IDEAS
    4. Welsch, Heinz, 2009. "Implications of happiness research for environmental economics," Ecological Economics, Elsevier, vol. 68(11), pages 2735-2742, September.
    5. Welsch, Heinz & Kühling, 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.
    6. Welsch, Heinz & Ferreira, Susana, 2014. "Environment, Well-Being, and Experienced Preference," International Review of Environmental and Resource Economics, now publishers, vol. 7(3-4), pages 205-239, December.
    7. Ferreira, Susana & Moro, Mirko & Welsch, Heinz, 2024. "Using Life Satisfaction and Happiness Data for Environmental Valuation: An Experienced Preference Approach," IZA Discussion Papers 16718, Institute of Labor Economics (IZA).
    8. Ahmadiani, Mona & Ferreira, Susana, 2019. "Environmental amenities and quality of life across the United States," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    9. Odermatt, Reto & Stutzer, Alois, 2017. "Subjective Well-Being and Public Policy," IZA Discussion Papers 11102, Institute of Labor Economics (IZA).
    10. Juncal Cuñado & Fernando Gracia, 2013. "Environment and Happiness: New Evidence for Spain," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 112(3), pages 549-567, July.
    11. Levinson, Arik, 2012. "Valuing public goods using happiness data: The case of air quality," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 869-880.
    12. Susana Ferreira & Mirko Moro, 2013. "Income and Preferences for the Environment: Evidence from Subjective Well-Being Data," Environment and Planning A, , vol. 45(3), pages 650-667, March.
    13. Welsch, Heinz, 2024. "Why is satisfaction from pro-environmental behaviors increasing in costs? Insights from the rational-choice decision-error framework," Ecological Economics, Elsevier, vol. 216(C).
    14. Katrin Rehdanz & Welsch Heinz & Daiju Naritaa & Toshihiro Okubod, 2013. "Well-being effects of a major negative externality: The case of Fukushima," Working Papers V-358-13, University of Oldenburg, Department of Economics, revised Jul 2013.
    15. Menz, Tobias & Welsch, Heinz, 2010. "Population aging and environmental preferences in OECD countries: The case of air pollution," Ecological Economics, Elsevier, vol. 69(12), pages 2582-2589, October.
    16. Welsch, Heinz & Biermann, Philipp, 2014. "Electricity supply preferences in Europe: Evidence from subjective well-being data," Resource and Energy Economics, Elsevier, vol. 38(C), pages 38-60.
    17. Welsch, Heinz & Biermann, Philipp, 2016. "Measuring nuclear power plant externalities using life satisfaction data: A spatial analysis for Switzerland," Ecological Economics, Elsevier, vol. 126(C), pages 98-111.
    18. Welsch, Heinz & Kühling, Jan, 2018. "How Green Self Image is Related to Subjective Well-Being: Pro-Environmental Values as a Social Norm," Ecological Economics, Elsevier, vol. 149(C), pages 105-119.
    19. Simon Luechinger, 2009. "Valuing Air Quality Using the Life Satisfaction Approach," Economic Journal, Royal Economic Society, vol. 119(536), pages 482-515, March.
    20. Senik, Claudia, 2009. "Direct evidence on income comparisons and their welfare effects," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 408-424, October.
    21. Hajdu, Tamás & Hajdu, Gábor, 2011. "A hasznosság és a relatív jövedelem kapcsolatának vizsgálata magyar adatok segítségével [Examining the relation of utility and relative income using Hungarian data]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 56-73.
    22. Bertram, Christine & Rehdanz, Katrin, 2015. "The role of urban green space for human well-being," Ecological Economics, Elsevier, vol. 120(C), pages 139-152.

    More about this item

    Keywords

    Pro-environmental consumption; Consumer choice; Utility maximization; Well-being; Life satisfaction;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    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:72:y:2011:i:c:p:75-87. 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.