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Competitive Altruism and Endogenous Reference Group Selection in Private Provision of Environmental Public Goods

Author

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  • Heinz Welsch

    () (University of Oldenburg, Department of Economics)

  • Jan Kühling

    () (University of Oldenburg, Department of Economics)

Abstract

We develop and test a model of social comparison in which individuals gain status through pro-social behavior (competitive altruism) and in which they endogenously choose the reference group and associated reference standard involved in signaling status (reference group selection). In our framework of private provision of environmental public goods, the optimal reference standard involves a balance between the magnitude of the status signal (implying a low reference standard) and the higher value of the signal in a greener social environment. By using a unique set of survey data we find evidence of (a) respondents behaving in a competitively altruistic fashion and (b) reference persons’ intensity of pro-environmental behavior depending on relevant attitudes of the respondents, consistent with predictions from our framework of reference group selection.

Suggested Citation

  • Heinz Welsch & Jan Kühling, 2012. "Competitive Altruism and Endogenous Reference Group Selection in Private Provision of Environmental Public Goods," Working Papers V-350-12, University of Oldenburg, Department of Economics, revised Oct 2012.
    • Handle: RePEc:old:dpaper:350
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    References listed on IDEAS

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    More about this item

    Keywords

    competitive altruism; reference groups; endogenous reference standard; pro-environmental behavior; private public good provision;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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