Trading-Off Efficient and Visible Pro-Environmental Actions

34 Pages Posted: 22 Dec 2023

See all articles by Raisa Sherif

Raisa Sherif

Max Planck Institute for Tax Law and Public Finance

Sven A. Simon

Max Planck Institute for Tax Law and Public Finance

Date Written: December 21, 2023

Abstract

Today’s environmental challenges prompt many individuals to take personal actions to address them. Those intrinsically concerned about the environment should focus on maximizing the impact of their actions. Yet, it’s observed that individuals often engage in pro-environment behaviors (PEBs) that are relatively inefficient in terms of their cost-benefit ratio. We examine if this is because individuals trade off efficient PEBs for inefficient, but visible ones. We conduct a representative online experiment in Germany to investigate this trade-off between efficient and visible PEBs, using contributions to carbon-offset initiatives. Our findings reveal three key insights: First, when considered independently, individuals display a preference for efficient PEBs. Second, in scenarios where efficiency and visibility dimensions are in conflict, visible PEBs crowd out efficient alternatives, indicating a willingness among respondents to prioritize being seen as green over environmental impact. Finally, we disentangle two motivations driving this preference for visible actions: social image concerns (a self-oriented motive) and role model aspirations. Notably, the latter motivation exerts a stronger influence, leading individuals more frequently to choose visible PEBs over efficient ones.

JEL Classification: C90, D90, Q50

Suggested Citation

Sherif, Raisa and Simon, Sven A., Trading-Off Efficient and Visible Pro-Environmental Actions (December 21, 2023). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2023-27, Available at SSRN: https://ssrn.com/abstract=4672097 or http://dx.doi.org/10.2139/ssrn.4672097

Raisa Sherif

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

Sven A. Simon (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

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