Learning to Love the Warm Glow: Endogenous Preferences and Intrinsic Motivation
46 Pages Posted: 4 May 2021 Last revised: 1 Sep 2021
Date Written: July 15, 2021
Environmental behavior changes over time, both within individuals and across cultures. Yet, economists, behavioral scientists, and environmentalists have a limited understanding of the drivers and dynamics of pro-social and pro-environmental behavior. This paper takes a model of endogenous preferences and uses a randomized control experiment to test one of its key predictions: increasing the intrinsic appreciation for pro-environmental behavior (i.e., warm glow) will increase the utility derived from making pro-environmental decisions and lead to an increase in pro-environmental behavior. This study uses a novel intervention that increases anticipated warm glow from performing pro-environmental behaviors via an intrinsically motivated effort-based task. We found that participants who worked at a task only to raise money for a non-profit increased their anticipated warm glow from carrying out future pro-environmental behaviors. When the opportunity to raise money for a non-profit was paired with an equal payment to the participant, the impact on anticipated warm glow disappeared. Those in the intrinsic motivation treatment group reported higher intentions to perform pro-environmental behaviors. The average treatment effect on reported pro-environmental behaviors, however, was not significant. A structural equation mediation model provides empirical support for the theoretical prediction that the intrinsic motivation intervention affects pro-environmental behaviors through the indirect mechanism of anticipated warm glow. This work adds to the growing evidence that anticipated warm glow is one of the strongest predictors of pro-environmental behavior. The responsiveness of anticipated warm glow to a simple intervention points to the importance of using endogenous preference modeling to fully capture the dynamic effects of environmental policies and to the potential to design policies and communications that activate intrinsic motivations for pro-environmental behavior.
Keywords: Endogenous preferences, pro-environmental behavior, warm glow, intrinsic motivation
JEL Classification: Q50, D91, C9
Suggested Citation: Suggested Citation